Analysis shows limited bond has higher rating
The recent financial and cost benefit analysis by the University of Guam appeared to be in line with what the governor's fiscal team had advocated to the Guam Legislature during the bond sessions in September.
By KUAM NewsGuam - The recent financial and cost benefit analysis by the University of Guam appeared to be in line with what the governor's fiscal team had advocated to the Guam Legislature during the bond sessions in September.
Guam Economic Development Authority Administrator Karl Pangelinan says the independent analysis conducted by financial and economic professionals from the University of Guam only corroborates what they've been saying all along. "That number one, the limited obligation structure was the way to go versus the general obligation in terms of cost-benefit and receiving an investment grade."
According to the analysis, the team of economic and financial professional from UOG found that a limited obligation bond secured by business privilege taxes is more favorable than a general obligation bond given financial and cost-benefit considerations.
Although she didn't vote in favor of the bond, Speaker Judi Won Pat says concerns raised by the Legislature were due to past bond ventures which featured both and were used interchangeably. The analysis provided more information and better informed she and her colleagues. She told KUAM News such a situation is good "because it's always good for the senators to know that because we have a lot of new members in the Legislature and some who are very experienced, like former Speaker Ben Pangelinan, so it's always good to have this."
Won Pat says it's now incumbent of leaders, herself included, to look at other ways to bring in revenues and invite businesses to Guam. The UOG analysis found that whether the government goes with a limited obligation bond or general obligation bond, one thing's certain: GovGuam must implement a credible stabilization plan that includes revenue growth.
For now, according to Pangelinan, they're moving full steam ahead.. "So now is when the real work starts in terms us getting the rating, we need to pre-market this bond and then ultimately price it. So we're trying to cram all those activities in a short time period. But we're still confident that given the financing schedule and given where we're at now in the entire process, that we will be able to get the bonds sold by December," he explained.