The A.B. Won Pat Guam International Airport Authority (GIAA) sold $37 million in refunding bonds in New York on Tuesday.
The bonds sale result in debt service savings of approximately 2.5 percent, the airport said.
In addition, the successful refunding will result in cash flow relief of $18.4 million in fiscal years 2020 and 2021. The debt service savings and cash flow relief achieved with the refunding paves the way for GIAA to move forward with various capital improvement projects that will enhance service, safety and security at the airport.
"I want to thank Gov. Lourdes Leon Guerrero, Lt. Gov. Joshua Tenorio, and the Guam Legislature for their approval and authorization to issue these refunding bonds so that we may continue to improve our Airport facilities for our customers," said Brian J. Bamba, chairman of the GIAA Board of Directors. "Special thanks to our airline partners, GIAA management and staff, GEDA, and the Office of the Governor."
Despite coming into a soft municipal bond market volume measured at $7 billion, and further uncertainty because of today's Federal Reserve meetings impact on interest rates, delayed Brexit and trade talks, the performance by GIAA was still strong.
"The interest in these refunding bonds is evidence of high confidence in Guam's airport and overall economy," said Thomas C. Ada, executive manager of GIAA. "A total of $252.72 million in orders were placed by investors representing 6.9 times more than the available amount in bonds."
"By floating these refunding bonds at a lower interest rate, we open up millions in cash flow savings that will go to unlock millions more in FAA grant funds to improve our airport even further. The tourism industry is competitive. It demands that we find new and creative ways to invest and do better. This helps us do that," Leon Guerrero said.
The closing of the bond is scheduled for Nov. 14.