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CDA reduces CPA’s loan interest rate
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Posted on Apr 24 2000
The Commonwealth Ports Authority expects to gain substantial savings from the Commonwealth Development Authority’s recent move to reduce 2.5 percent per annum its adjusted loan balance used up for the completion of the Saipan Harbor Improvement Project (SHIP).
CDA approved the interest rate reduction upon CPA’s request, to take effect retroactively from November 16, 1996 until such time that the outstanding balance is paid in full.
Originally at 5 percent, the interest rate reduction dipped to a mere 2.5 percent per annum, compounded quarterly.
CPA currently has over $10,186,334.63 adjusted loan balance from the $43 million harbor improvement project.
In a letter addressed to CDA Board Chair Juan S. Tenorio, ports authority Executive Director Carlos H. Salas expressed appreciation to the development authority for granting the rate reduction, noting that the discount will undoubtedly help CPA meet its seaport revenue bonds and senior series A obligations.
Mr. Salas, however, appealed to the CDA board to reconsider its original request that the reduced interest rate be made applicable to the inception date of CPA’s loan, retroactively from May 29, 1992.
It was in May 1992 that CPA entered into this loan agreement with the development authority, to support CPA’s improvement efforts at the Saipan harbor.
Finally completed early last year, the harbor improvement project was meant to boost CNMI’s competitive edge in cargo transshipment within the Asia-Pacific.
The $43 million seaport facility highlights 2,600 linear feet of berthing space, a 22-acre container yard, a deeper channel and a wider turning basin. It also offers efficient water, sewer and fuel systems.
