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Teno gives nod to $60-M bond float
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Posted on Sep 29 1999
Governor Pedro P. Tenorio signed into law yesterday a bill which authorizes the Commonwealth Development Authority to float $60 million worth of bonds that would generate the local matching funds for capital improvement projects listed in the 702 CIP Plan.
House Bill 11-435, entitled Capital Improvement Project Bond Authorization Act and introduced by Rep. Karl T. Reyes, became Public Law 11-102.
The new law allows CDA to issue tax-exempt general obligation bonds “in one or more series.”
Upon his assumption into office in January 1998, the governor created a multi-agency task force that identified infrastructure projects to be built within the funds from the US-CNMI financial assistance agreement in 1996.
This agreement covers the period from FY 1996 to FY 2002. The total amount of CIP funds provided for this period is $154 million. Under the agreement, the CNMI shall produce half of the total amount.
The government earlier reported that it has so far raised nearly $42 million to meet the local matching requirement and would need at least $35 million more to spend the remaining balance.
“The current condition of the CNMI government does not currently possess sufficient funds to match the federal Covenant Section 702 Grant portion without resorting to debt financing,” the new law stated.
It authorizes CDA to secure interim financing to fund the projects contemplated in the bond issue from financial institution in an amount of up to $30 million.
“The funds borrowed under the interim financing shall be retired from funds generated by the bond issuance,” the law stated.
PL 11-102 also authorizes the government to spend portions of the funds to be produced on other capital improvement projects not included in the 702 CIP Plan. (MCM)
