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HomeNewsArchivesTOBACCO FUNDS BACK V.I. BOND ISSUE

TOBACCO FUNDS BACK V.I. BOND ISSUE

Nov. 21, 2001 — The V.I. Public Finance Authority was successful Tuesday in floating $21.7 million in bonds backed by the territory’s share of the tobacco settlement proceeds. The money will be used to improve the territory's health care system.
Gov. Charles Turnbull announced Tuesday that the PFA closed the $21.7 million Tobacco Settlement Asset-Backed Bonds Series 2001 in New York City. The territory’s net share of the tobacco settlement, which is $18.4 million, will be leveraged to finance a number of projects at the territory’s two hospitals and in the Department of Health.
The projects include replacing and renovating several DOH buildings. On St. Croix, the Juan F. Luis Hospital will get a renovated emergency room and clinic, improvements to the cardiac care unit, a new warehouse, water line and air conditioning system for the morgue.
On St. Thomas, the tobacco proceeds will cover the costs of developing new facilities and purchasing radiotherapy and cancer center equipment for the Roy Lester Schneider Hospital.
"As a result of the success of leveraging the Tobacco Settlement funds, the Virgin Islands is positioned to launch major capital initiatives to address critical health care needs consistent with health care being designated an administration priority," Turnbull said in a release.
The governor said that favorable market conditions allowed the government’s managing underwriter, Salomon Smith Barney, to "aggressively price the bonds at levels which were in line with other deals on the market."
He said the bonds are expected to be sold at coupon rates ranging from 4.3 percent to 5.125 percent. They will have a final maturity date of 2031 and an expected average life of about 14 years.
Moody’s Investor Services rated the bonds A-3, according to Turnbull. The rating is indicative of the risks normally associated with tobacco transactions, the structure of the bonds and the risk associated with the government of the Virgin Islands.

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Nov. 21, 2001 -- The V.I. Public Finance Authority was successful Tuesday in floating $21.7 million in bonds backed by the territory’s share of the tobacco settlement proceeds. The money will be used to improve the territory's health care system.
Gov. Charles Turnbull announced Tuesday that the PFA closed the $21.7 million Tobacco Settlement Asset-Backed Bonds Series 2001 in New York City. The territory’s net share of the tobacco settlement, which is $18.4 million, will be leveraged to finance a number of projects at the territory’s two hospitals and in the Department of Health.
The projects include replacing and renovating several DOH buildings. On St. Croix, the Juan F. Luis Hospital will get a renovated emergency room and clinic, improvements to the cardiac care unit, a new warehouse, water line and air conditioning system for the morgue.
On St. Thomas, the tobacco proceeds will cover the costs of developing new facilities and purchasing radiotherapy and cancer center equipment for the Roy Lester Schneider Hospital.
"As a result of the success of leveraging the Tobacco Settlement funds, the Virgin Islands is positioned to launch major capital initiatives to address critical health care needs consistent with health care being designated an administration priority," Turnbull said in a release.
The governor said that favorable market conditions allowed the government’s managing underwriter, Salomon Smith Barney, to "aggressively price the bonds at levels which were in line with other deals on the market."
He said the bonds are expected to be sold at coupon rates ranging from 4.3 percent to 5.125 percent. They will have a final maturity date of 2031 and an expected average life of about 14 years.
Moody’s Investor Services rated the bonds A-3, according to Turnbull. The rating is indicative of the risks normally associated with tobacco transactions, the structure of the bonds and the risk associated with the government of the Virgin Islands.