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Charlotte Amalie
Monday, August 15, 2022
HomeNewsArchivesMatching Fund Bonds get BBB+ Rating

Matching Fund Bonds get BBB+ Rating

About $80 million of Matching Fund Revenue Refunding Bonds to be issued by the Public Finance Authority have been rated BBB+ by the national bond-rating agency, Fitch Ratings, according to a statement released Friday by Government House.

Gov. John deJongh Jr. said the rating shows confidence in the strength of the territory’s rum industry and economic recovery.

“These rating actions are a positive comment on the strength of the territorial rum industry and reflect positively on the government’s continuing efforts to stabilize the financial position of the territory in the wake of the global financial collapse and the closure of the Hovensa facility on St. Croix,” deJongh said.

By issuing the Matching Fund Bonds, the government plans to reduce its cost of funding and realize budget savings for the coming fiscal year beginning Oct. 1, deJongh said. Legislation to support the pending bond sale is to be placed before the Senate for consideration later this month.

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Bond ratings are issued by analysts who assess the credit worthiness of a government or corporation debt issues, similar to the way credit agencies issue credit ratings for individuals. Fitch’s is one of the major such agencies. Their ratings run from AAA to D. The BBB+ rating the territory received is considered a high medium grade.

“The action by Fitch is a strong affirmation of our rum-industry initiative and the market strength of our rum company partners," deJongh said. "It is as well a positive statement of support for our financing program and speaks to the support of the investor community for the steps we continue to take to bring stability to our financial situation.”

The governor continued, “The path forward continues to be challenging but we continue to pursue realistic steps to address our financial challenges, even as we lay the foundation for new investment across the territory. We look forward to continued positive news from the other bond rating agencies and to legislative support for this financing, which is integral to our budget plans for the coming year.”

Commissioner of Finance and PFA Executive Director Angel E. Dawson Jr. said officials from the territory met with Fitch’s analysts to discuss the proposed bond issue and rating.

“The discussion with the rating analysts were in depth and constructive. They understand the challenges that we are facing and the steps we continue to take to address them," Dawson said.

"They were positive on this transaction and encouraged by the possibility of a restart of the Hovensa refinery, and the positive impact that a sale of the refinery would have on employment and economic opportunity on St. Croix, and for the government’s financial position,” Dawson continued.

“We continue to have strong support for our bonds and aim to be in a position to sell these bonds to the investment community by the end of this month to take advantage of continued investor interest and attractive interest rate environment,” he said.

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About $80 million of Matching Fund Revenue Refunding Bonds to be issued by the Public Finance Authority have been rated BBB+ by the national bond-rating agency, Fitch Ratings, according to a statement released Friday by Government House.

Gov. John deJongh Jr. said the rating shows confidence in the strength of the territory's rum industry and economic recovery.

“These rating actions are a positive comment on the strength of the territorial rum industry and reflect positively on the government’s continuing efforts to stabilize the financial position of the territory in the wake of the global financial collapse and the closure of the Hovensa facility on St. Croix,” deJongh said.

By issuing the Matching Fund Bonds, the government plans to reduce its cost of funding and realize budget savings for the coming fiscal year beginning Oct. 1, deJongh said. Legislation to support the pending bond sale is to be placed before the Senate for consideration later this month.

Bond ratings are issued by analysts who assess the credit worthiness of a government or corporation debt issues, similar to the way credit agencies issue credit ratings for individuals. Fitch's is one of the major such agencies. Their ratings run from AAA to D. The BBB+ rating the territory received is considered a high medium grade.

“The action by Fitch is a strong affirmation of our rum-industry initiative and the market strength of our rum company partners," deJongh said. "It is as well a positive statement of support for our financing program and speaks to the support of the investor community for the steps we continue to take to bring stability to our financial situation.”

The governor continued, “The path forward continues to be challenging but we continue to pursue realistic steps to address our financial challenges, even as we lay the foundation for new investment across the territory. We look forward to continued positive news from the other bond rating agencies and to legislative support for this financing, which is integral to our budget plans for the coming year.”

Commissioner of Finance and PFA Executive Director Angel E. Dawson Jr. said officials from the territory met with Fitch's analysts to discuss the proposed bond issue and rating.

“The discussion with the rating analysts were in depth and constructive. They understand the challenges that we are facing and the steps we continue to take to address them," Dawson said.

"They were positive on this transaction and encouraged by the possibility of a restart of the Hovensa refinery, and the positive impact that a sale of the refinery would have on employment and economic opportunity on St. Croix, and for the government’s financial position,” Dawson continued.

“We continue to have strong support for our bonds and aim to be in a position to sell these bonds to the investment community by the end of this month to take advantage of continued investor interest and attractive interest rate environment,” he said.