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Guam Issues $185 Million in Bonds

By Munichain News Desk
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The Guam Waterworks Authority sold $184.9 million in bonds to refund previously issued securities.

The authority issued the bonds in two series. The Series 2024A bonds, consisting of $133.6 million, mature between 2025 and 2046, yielding between 3.02% and 3.97%. The Series 2024B bonds, consisting of $51.3 million, mature between 2025 and 2034, yielding between 3.02% and 3.3%. All of the bonds pay interest at 5%. The securities received a rating of Baa2 from Moody’s Investors Service and A- from S&P Global Ratings.

“The Baa2 rating incorporates the enterprise’s adequate financial position and debt service coverage despite lower revenue collections in the years following the pandemic,” Moody’s analysts wrote.

The financing included a tender offer structured to allow the Guam Waterworks Authority to use the issuance to fund the repurchase of bonds from existing bondholders. This is the first time an issuer in Guam has used such a structure.

The authority will use the issuance proceeds to refund bonds that it sold in 2014. Officials said the measure will achieve debt service savings of $15 million, local outlet KUAM-TV reported.

The bonds are limited obligations of the authority, payable by its revenue.

RBC Capital Markets, LLC served as underwriter on the issuance, purchasing the bonds for $203 million. The price reflected a premium of $19 million and a discount of $1 million.


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