The Virgin Islands Transportation and Infrastructure Corporation, a subsidiary of the Public Finance Authority, has completed the successful pricing of its sale of $150 million in Grant Anticipation Revenue Bonds, Government House announced Tuesday evening.
With the pricing of the bonds the government secured funding for $96 million in transportation projects in the territory, as well as to refund the outstanding $54 million of GARVEE Bonds issued in 2015, according to the press release.
The transportation projects that will be funded from the proceeds of the sale include the completion of Phase II of the Veterans Drive Improvement on St. Thomas, the funding of the St. Thomas to St. Croix ferry, and additional road improvements on St. Croix, it said.
“In the face of significant bond market volatility over recent weeks, the bond sale enjoyed strong investor support from bond fund companies and asset managers that have become active purchasers of Virgin Islands bonds over the years, including Vanguard, Fidelity, Goldman Sachs, Nuveen, and others,” the release stated.
The bonds of each maturity were significantly oversubscribed, which enabled the yields to be reduced by up to 10 basis points on the longest bond maturities, resulting in an overall savings to the territory of just under $1 million, it said. After the repricing to reduce the yields, the bonds were sold at an overall true interest cost of 4.54% for the 20-year bond issue.
The yields on the bonds ranged from 3.42% in 2025 to 4.75% in 2044. The refunding of the 2015 GARVEE Bonds produced a present value savings of $1.5 million, or 2.86% of the refunded bonds, according to the release.
The “triple tax-exempt” GARVEE Bonds received an “A” rating with a stable outlook from Standard & Poor’s and were sold with spreads over the “AAA MMD” index ranging from 57 basis points in 2025 to 60 basis points in 2044. These spreads represent the tightest spreads to the triple-A index of any government bond transaction in recent memory, it said.
Gov. Albert Bryan Jr. took note of the strong support for the GARVEE Bonds across the institutional investor community. “This financing marks a new milestone in terms of broad public support for the territory. With this financing, we have secured financing for important transportation projects on a very low, fixed-rate basis. We greatly appreciate the support of our underwriters and our federal partners, who were critical in bringing this financing to a successful closure,” he said.
“It is hard to overstate the degree of volatility in the bond market, as we prepared to come to market. The Moody’s downgrade of the U.S. Government cast a pall over the markets at the end of last week. But by the time we brought our issue to market, things had settled down, and we enjoyed widespread support. This turned out to be a good day for the Virgin Islands,” said Nathan Simmonds, Public Finance Authority director of finance and administration, who led the bond pricing effort in New York on behalf of the V.I. Transportation and Infrastructure Corporation.
