Guam – Adelup is crediting Governor Calvo’s fiscal policies for the improvement in GovGuam’s credit rating.
A release from Adelup cites the October 17th S&P decision to boost GovGuam’s credit rating to BB-, from B+; and the “A-“ rating S&P gave to GWA’s Revenue Bonds Tuesday as well as the decision by Fitch, on the same day, to upgraded the outlook on GWA’s plans to issue $173 million in new bonds this month.
Both rating agencies cited GWA’s phased 5 year 57% rate hike plan saying it “demonstrates continued political willingness to raise rates.”
The Governor is quoted as saying the improved ratings are “a testament to the sacrifices our GovGuam employees and the people of Guam” and the release credits Governor Calvo and his fiscal policy team for putting “best practices in place” and the improved “financial stability of our government.”
READ the release from the Governor’s Office below:
“Let the record speak for itself. Just this year GovGuam’s credit rating was raised for the first time in years. For another agency to improve their bond ratings is a testament to the sacrifices our GovGuam employees and the people of Guam have made so we could get our finances under control. We are seeing the results of these sacrifices—tax refunds paid on time, merit bonuses, public safety increments being paid back to the people, and improved credit ratings in the bond market.” Governor Eddie Baza Calvo
Standard & Poors Gives GWA Bond High Rating
Standard & Poors has rated, for the first time, Guam Waterworks Authority with an ‘A-‘ rating with a stable outlook. This means that Guam Waterworks is now able to borrow money at relatively low interest rates to support their efforts to improve their wastewater and water treatment infrastructure.
GWA intends to use the series 2013 bond proceeds to fund projects in its capital improvement program, outlined in a 2011 stipulated order with the District Court.
Improved Credit Rating a Result of Rise in Tourism Industry
The S&P report highlighted the rise in tourism, Guam’s number one economic driver, as a factor for the improved credit rating. “As the economy continues to grow both directly and indirectly from the buildup and growth in the tourism sector, income indicators are expected to grow as well.”
Fitch Assigns GWA ‘BB’ Rating with Positive Outlook
The news was also good from Fitch Ratings, which assigned GWA’s bond a ‘BB’ rating with a positive outlook. Fitch again noted the upswing of Guam’s economy, writing in its report, “…a recovery is evident with fiscal [year] 2013 marking the second highest year for visitor arrivals and hotel occupancy rates at 85%, the highest in more than a decade.”
Improved GovGuam Rating a Result of Strict Fiscal Control
In October, Standard & Poors raised GovGuam’s credit rating for the first time in years. Since coming into office in 2011, Governor Calvo and his fiscal policy team put best practices in place, sold bonds at record low interest rates to pay the 20-year-old debt owed to the people of Guam, and improve the financial stability of our government.