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BoG lauds Fitial’s rapid action on CPA issue
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Posted on Jun 14 2008
Bank of Guam has praised Gov. Benigno R. Fitial for his decisive action in addressing the Commonwealth Ports Authority’s financial problems.
The bank serves as trustee for the $20-million airport revenue bond issued by the ports authority. While the authority continues to make payments, and has reduced the bond amount to $17 million, it has failed to meet the bond’s required debt ratio of 1.25.
Bank of Guam president and chief operating officer Lou Leon Guerrero said that CPA’s action plan, as established by the governor’s directives and applied by CPA management “reflect good faith efforts to get the airport on track” with compliance to the terms required by the bond indenture agreement.
“The governor’s quick and aggressive decisions have made your management’s corrective actions possible,” Leon Guerrero said in a letter to CPA acting executive director Lee Cabrera.
“It is critical that you [stay] the course. Any attempts that will cause an interruption or delay in the action plan will be viewed by the [Bank of Guam], as trustee, as further violation and will leave the trustee no choice but to take the necessary recourse,” she added.
Fitial, concerned that the bank might issue a notice of default and take over CPA, issued an executive order assuming control of the agency. The Commonwealth Ports Authority’s board of directors had been unable to get a quorum for its meetings, making it impossible to take action on the bond issue. But the Legislature voted to reject the governor’s action.
Still, CPA remains under the Governor’s Office because the governor signed a separate order declaring the authority under a state of disaster emergency. The initial declaration had expired, and a 30-day extension was issued on Thursday.
