By Pacific Island Times News Staff
Bolstered by strong investor demand and continued improvement in financial metrics, the Guam International Airport Authority has sold $67.8 million in bonds in the municipal market through the first-of-its-kind standalone tender offer for Guam coupled with bond refinancing which resulted in a 4.27 percent.
All in true-interest-cost and savings of $3.23 million over the remaining term of the bonds through fiscal 2043.
The GIAA bonds were oversubscribed by 9.3 times, which allowed for an opportunity to lower borrowing rates for higher savings.
“It has been the commitment of our administration to do all we can to improve the financial viability of not only our government but also our only
commercial airport,” Gov. Lourdes A. Leon Guerrero said.
“Our administration has been at the forefront of achieving debt service
reduction and has saved the people of Guam over $124 million over 10 bond issues since we took office," she added.
Airport officials said the municipal bond issuance was received with as much
enthusiasm by municipal investors due to the GIAA’s strong fundamentals and resilience as it continues to recover to pre- pandemic passenger activity.
Investor interest in the GIAA credit was strong and influenced by the recent upgrade of the government of Guam’s general fund credit rating.
Overall interest rates have declined since their fall 2023 peak levels and the
tender and refinancing structure allowed the GIAA to offer to buy bonds
that could not otherwise be refinanced for debt service savings from existing GIAA bond holders and sell refunding bonds to finance the purchase. In the current interest rate environment, municipal issuers have increasingly used tender offers to generate debt service savings.
"We believe investors showed strong interest in this transaction given the
continued improvement in GIAA financial metrics as well as progress in our tourism recovery," stated Brian Bamba, chairman of the GIAA board of directors.
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