The Government of Guam sold general obligation bonds worth $30 million to fund a new cell at the Layon Landfill at a true interest rate of 3.25 percent and payable over 12 years.
This week’s market volume was $7 billion, however, Guam’s offering was extremely well received, and initial interest rates were reduced by 25 basis points, according to a press release from Adelup.
The governor’s office said, This ultimately reduced total debt service by approximately $1 million from the initial offering terms. The offer was oversubscribed 12.9 times.
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Current pricing reduces annual debt service to $2.998 million for this borrowing from the $3.155 million contained in the original financial projections filed with the District Court of Guam--an annual savings of approximately $157,000.
Twenty-three firms participated in the sale of which ten firms placed orders for the entire issue--nine with whom the Fiscal Discipline Team spoke directly prior to the sale.
“The result of this bond sale demonstrates the confidence investors have in our administration and our commitment to fiscal discipline. It is important to note that recognition of the strong legislative will to maintain the BPT at 5 percent was an important focus of many of the discussions with Investors. The Fiscal Discipline Team was able to achieve an outstanding result for the financing of the new landfill cell at the lowest possible cost,” Gov. Lou Leon Guerrero said.
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