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CPA makes pitch for lower bond interest
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Posted on Dec 01 1998
Officials of the Commonwealth Ports Authority will leave today for San Francisco, California to meet with two rating agencies and convince them of the agency’s financial capability to meet debt service requirements.
According to Carlos H. Salas, executive director, they will meet with Fitch and Standard & Poors who would be conducting the investment grade rating within the year the bonds were issued.
The ports authority has engaged the services of the two rating agencies to prevent the interest rate from increasing by 45 basis points. Representatives from Fitch recently inspected the seaport and airport facilities on Saipan and Tinian.
During the meeting with the two agencies, the ports authority will provide a more detailed information on the operations of the agency specifically on its projections amid declining revenues. Also set to leave aside from Salas are board member Roman Tudela and financial consultant Rex Palacios.
Currently, the ports authority is paying a 6.25 percent interest rate for the airport bond and 6.40 for the seaport bond. Both series were sold non-rated.
The ports authority has carried out various cost-cutting measures this year such as freeze in hiring, acquisition of office equipment, cuts in overtime and travels.
For fiscal year 1999, the CPA board of directors approved a combined budget amounting to $11.10 million as officials try to find ways on how to further cut cost amid declining revenues.
Of the $9.73 million budget for the airport, 58 percent will go to salaries and wages of the employees. Total operating revenues for the airport is $2.32 million lower for this fiscal year compared to fiscal year 1998.
On the other hand, 48 percent of the $1.37 million seaport budget will go to salaries and wages of employees. Of the three seaport offices, Saipan got the biggest allotment for operating expenses amounting to $1.26 million.
With the additional flights of Asiana Airlines and Japan Airlines, Salas said the airport operations will get additional revenue for this fiscal year.
