Pago Pago, AMERICAN SAMOA — The American Samoa Economic Development Authority (ASEDA) board of directors has identified seven revenue sources, including $3 million in broadband revenues, for repayment of the proposed new $51.26 million bond, which is scheduled for issuance the middle of next month.

Proceeds from the sale of the ASEDA Proposed Series 2018 Bonds includes $35.5 million for the American Samoa TeleCommunications Authority and $10 million for the new Legislature building, which is being constructed on a site that the US Federal Emergency Management Agency Agency (FEMA) considers in violation of federal regulations. (See Samoa News last Friday for other details.)

ASG officials said over the weekend that the ASEDA delegation, which departed the territory last Thursday night, will be meeting in Honolulu on Wednesday this week with US investors. 

The Proposed Series 2018 Bonds report document, received by Samoa News last week, outlines seven revenue sources — totaling $11.80 million — for repayment of the new bond:

•   Broadband revenues $3 million

•   3% miscellaneous excise tax $3 million

•   Tobacco tax $2.1 million

•   Petroleum Cooperative $2 million

•   Beer excise tax $1 million

•   Scanning fees $500,000

•   Business license fees $200,000

(Samoa News understands that the broadband revenues referred to, are revenues earned through ASTCA.)

According to the 2018 Bonds document, prepared by Utah-based EFG Consulting, the current debt payment for the 2015 bond series is over $8.05 million annually, while the new proposed bond’s estimated payment will be more than $4.49 million, with the “true interest cost” at 7.1509%.

The document also includes the ASEDA calendar of events, which revealed that ASEDA gave approval for the new bond sale on Sept. 26, which is also the date that the total of the bond was finalized as well as repayment sources.

Among the “Critical Issues” cited in the document, is to “Finalize Broadband Utility Plan”, which includes the need for all documents related to the Hawaiki cable transaction — such as agreements between Hawaiki and ASTCA as well as ASTCA and the ASG Employees Retirement Fund.

“Need these [documents] to ensure tax-exempt bond issuance,” according to the ASEDA Proposed Series 2018 Bonds document, which also shows — under the calendar that the ASEDA meeting on Wednesday this week in Honolulu is for the “rating presentation” and “to approve formal bonding resolution”.

Additionally, the ASEDA is expecting to receive on Nov. 27 the bond rating from Moody’s — the US based rating firm — followed two days later with the start of “Marketing of Bonds”. ASEDA plans to close the bonds on Dec. 18, during a closing ceremony.

As to whether ASG and ASEDA require Fono approval for a new bond sale, that question remains pending, with neither the ASEDA board chairman nor the vice chairman responding to Samoa News questions from two weeks ago.

However, two government officials, contacted over the weekend, gave the simple answer of “no”. They pointed to one of the provisions in the updated ASEDA statute, approved by the Fono more than three years ago during the 33rd Legislature.

That provision states in part, “The Authority [ASEDA] may issue its bonds hereunder from time to time without further authorization from the Legislature subject to the procedures and restrictions in this chapter.”

Samoa News notes that several lawmakers at the time had questioned this particular provision when the bill was debated in both Chambers. Those lawmakers had argued any future bonds sales should come back to the Fono for review and approval.

The Fono is currently out of session and only returns in January 2019 for the new legislative session.