Guam – GMH Administrator Joseph Verga says the documents for the $25 million dollar loan were finally signed by Governor Eddie Calvo last Friday, and the money will be in the bank by mid-week.
The Bank of Guam’s decision to approve the loan follows the signing by the Governor two weeks ago of Bill 250, which waived GovGuam’s sovereign immunity in the event of a GMH default, a requirement for the loan’s approval.
The approval will help avert another garnishment, but it doesn’t wipe out GMH’s debt.
Verga reminds us that about half the proceeds from the loan will go towards refinancing a current GMH loan. The other half, he says, will only be enough to pay off the debt owed to their biggest vendor, Perry Point.
“We won’t get the whole $25 million. What it is, we actually set it up as a credit, so we’ll be able to take it as we use it. Half of the $25 million will go toward paying the previous loan. So we’re gonna refinance the previous loan to avoid, to lower the interest, avoid our balloon payments. We’re hoping to net approximately $13 million as a credit,” he explains.
Once the loan is transferred into GMH coffers, Verga says at the top of their list to pay-off is about $4 million dollars owed to Perry Point. The hospital remains at risk of federal garnishments if Perry Point, a federal government vendor, is not paid off immediately.
“The garnishment hasn’t kicked in. I have communicated with Perry Point and they have indicated that based on my communication with them on the status of the loan that they will communicate with their superiors and they are, they will make it clear that it is their recommendation that the garnishment not take effect. Although it really has nothing to do with the human beings. It still is an automatic machine. It was like a computer generated thing so we still remain at risk as long as we owe Perry Point,” he points out.
Once Perry Point is paid off, adds Verga, GMH management will then determine which vendors will be paid off next.