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ASEDA’s ratings report outlines proposed spending from 2021 Bonds

Rendering of new Fono building and proposed court house
Shows renderings of proposed Fono offices & court house buildings
fili@samoanews.com

Pago Pago, AMERICAN SAMOA — American Samoa Economic Development Authority’s (ASEDA) new rating report focuses on the preliminary total of more than $41 million for the government’s proposed 2021 Bond Series, in which revenues earned are earmarked for the new Fono building and Judiciary Branch building and a study for the relocation of the adult jail and juvenile detention center.

In a “Notice of Bonds To Be Issued”, ASEDA announced that the board of directors on Apr. 22 adopted a resolution in which it authorized the issuance and sale of Series 2021 bonds with General Revenue Bonds - Series 2021A - in an aggregate principal amount not to exceed $21 million for the new Fono and Judicial buildings and a feasibility study on the relocation of the youth and adult correctional facilities.

According to the ASEDA notice, published in Samoa News in April this year, General Revenue Refunding Bonds, Series 2021B Bonds will be issued is an amount not to exceed $10 million for the purpose of refunding ASEDA’s outstanding General Revenue Bonds, Series 2015B; and General Revenue Refunding Bonds, Series 2021C an aggregate principal amount not to exceed $16 million for the purpose of refunding ASEDA’s outstanding General Revenue and Refunding Bonds, Series 2015.

The ASEDA’s 71-page colorful rating presentation report, gives a preliminary total of the Bond 2021 Series at just over $41.38 million, saying that: “Amounts of bonds subject to change due to market and structuring needs.”

The report explains that 2015 bonds funded the design and engineering of the new Fono Building. Furthermore, the 2018 Bonds funded the majority of the construction.

It also says that $11 million of the 2021A bonds will fund the furniture, fixtures and equipment for the building along with minor adjustments for additional meeting space and offices along with new office space for all Fono members.

Included in the report is the updated architectural rendering of the new Fono Building.

For the High Court building, the report says that $6.5 million of the 2021A bonds will fund the construction of a new court building, saying that the current high court building was built more than 50 years ago and has limited capacity and safety features. “The new court building will be a modern building with sufficient space to house the courts far into the future,” it says and provided an illustration of what the new building will look like once completed.

As to the relocation of Correctional Facility, the report say $500,000 of the 2021A bonds will be used to prepare a technical plan to move the current adult correction facility from prime real estate to a more central location. This will include relocating the adult and youth facilities to one campus.

The report also explains that the 2021B and C bonds will refund for debt service savings the 2015B and C bonds, respectively. “This annual savings will be used to help fund the 2021A projects,” it says and summarized the repayment of the new bond debt and much other financial information on ASG.

Samoa News was informed by a local resident on Wednesday this week, that ASEDA has a “bonds 2021 rating presentation” report on its website (https://www.americansamoa.gov/aseda) with the link on the homepage of the ASG website (www.americansamoa.gov)

The ASEDA website, includes a section titled “ASEDA 2021” with a seven-minute video that provides a summary of American Samoa and separate link to the rate presentation report, that shares Gov. Lemanu Palepoi Sialega Mauga’s summary vision for American Samoa, “Looking Forward” which includes:

•           We are committed to comply with all local and federal laws specific to financial management, budgetary compliance, accountability, and transparency.

•           As trustworthy stewards, we shall deploy all resources for the safety, wellbeing, and improvement of life for our people and ensure the Territory's financial and economic stability.

The governor’s vision on the “Most pertinent to the bond issuance” includes:

•           We commit that government revenues required to pay our bond debt will be available to guarantee payment before payment of other obligations of the American Samoa Government.

•           We commit to the goals and values aimed at improving economic diversification, improve the safety and health of our people, investments to education of our youth, reliable transportation, enhanced infrastructure, and services for our community.

According to the calendar of events in the report, Apr. 6th was when the projects were finalize with the governor, ASEDA, and Cody Deeter, the municipal advisor and president/CEO of EFG Consulting.

Additionally, May 5th was the date for the rating presentation by Zoom and May 19th was the date ASEDA received the rating from Moody’s Investors Service.

Moody’s announced on May 18th that it has affirmed a Ba3 rating on American Samoa’s outstanding general revenue bonds and assigned the same rating — Ba3 — to the new 2021 bond series. It also has “revised the outlook on the Territory of American Samoa to stable from negative” and affirmed the Ba3 rating for American Samoa's outstanding general revenue bonds. Ba3 is the bond rate given to debt instruments that are generally considered speculative in nature. (See Samoa News edition May 20th for details.)

The calendar of events also states that closing of bond series 2021A & C was to be held on June 16th during a closing ceremony and closing for series 2021B on Sept. 1st. Neither events is considered “completed” in the calendar.

A wide range of economic and financial issues are covered in the report as well as brief profiles of ASEDA board members, its support team, as well as the governor and lieutenant governor. Samoa News will report in future editions on financial matters of interest in the report.

ASEDA in a May 7th press release said that due to current conditions in the global financial markets, it is considering refinancing or refunding portions of the 2015 bonds (Series B & C) to reduce the interest rates and annual debt payments.

ASEDA says it will use the reduction in debt service payments to add new debt to complete the funding of the Fono building including the addition of office space for all Fono members, fund a new court building to replace the aging high court building, and fund a study to relocate the adult and youth correction facilities.

Debt service will remain at the same level into the future after the refunding/refinance and adding new debt for the projects described. (See Samoa News edition May 10th for press release details.)