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CDA prepares debt relief plan for borrowers
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Posted on May 12 2009
The Commonwealth Development Authority is currently drafting a workable debt relief plan for its borrowers in lieu of the global economic crisis.
“We’re trying out what sort of assistance to at least provide some additional relief to [CDA borrowers],” CDA executive director Manny A. Sablan said in an interview yesterday.
Sablan said CDA’s primary intention is to ease some of the burdens that borrowers are facing, especially those who are heavily impacted by the economic downtrend.
“Very soon, we will be presenting to the board the definitive plan for this,” Sablan assured.
CDA signed last week an equity conversion agreement with the Commonwealth Utilities Corp. Sablan explained that this would convert the debt of CUC to CDA into equity or preferred stocks.
That means CUC’s loan would no longer be considered debt and CDA would own preferred stocks with CUC, entitling CDA to dividends corresponding to that stock.
Sablan said this agreement is mutually beneficial to both parties.
CDA was created with the sole purpose to stimulate economic development in the CNMI through economic loan funds to private and public sectors for economic development.
It provides aid for financing of capital improvements projects undertaken by the Development Banking Division.
By provisions of the law, CDA serves as the CNMI’s development bank to restructure debts and provide loan guarantees through private lending institutions, to provide funding for new and ongoing development projects and other programs.
It also supports marine, agricultural and commercial activities through its loan programs and offers technical assistance to existing business.
In other news, PTI Services Inc. is set to present to the CDA board its plan to expand its call center service in the CNMI.
The company earlier conducted a public hearing on this and it’s now the turn of the members of the CDA board to see the presentation.
The board is headed by Pete Itibus.
