Plans are underway to bolster Guam's water infrastructure with a significant financial move. The Consolidated Commission on Utilities in Guam has recently given the green light to the Guam Waterworks Authority’s proposal to issue $270 million worth of bonds. Miguel Bordallo, the general manager of the authority, stated that these bonds are expected to carry an overall interest cost of 4.91%. Financial institutions RBC Capital Markets and Raymond James have been assigned to manage the underwriting process for this transaction.
The bond issuance is strategically designed to cater to long-term infrastructure needs. According to Bordallo, the bonds will mature between 2030 and 2055, spanning an average duration of 20.4 years. Pricing is anticipated to occur mid-July, following which the authority will pursue credit ratings in June. Currently, Moody’s Ratings assigns a Baa2 rating, S&P Global Ratings an A-minus, and Fitch Ratings a BBB grade to the utility's existing bonds. These funds will be allocated towards essential projects involving water production, treatment, distribution, storage, as well as wastewater management systems. Additionally, they aim to comply with regulatory mandates regarding environmental protection and chemical safety.
Investment in infrastructure not only addresses immediate operational demands but also fosters sustainable development. The planned projects align with a court order from 2011 and a recent consent decree with the U.S. Environmental Protection Agency. They also target reducing water loss and enhancing supervisory control through advanced data acquisition technologies. Furthermore, securing a short-term financing package of $75 million could defer future market entries for additional bonds. Before finalizing the sale, approvals from both the Public Utilities Commission and the Guam Economic Development Authority are necessary. This initiative underscores the authority’s commitment to maintaining robust financial health while meeting public service obligations effectively.
