PUC Approves GPA Refinance, With Tighter Restrictions

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Guam – The Public Utilities Commission has approved GPA’s refinance proposal which may result in a reduction of your power rates.

But CCU Chairman Simon Sanchez says the approval comes with less flexibility than what GPA was seeking.

GPA was asking to refinance and restructure its debt from 1993 and 1999. This could save rate payers as much as $9 million a year and roll back the recent rate increase that occurred in May.

But Sanchez says it will be dependent on the market over the next weeks because the PUC insists that the interest rate fall within a set ceiling:

“They said … as long as you’re below 4.95%, you can do the deal. So if the market doesn’t cooperate in the next 9 days and it comes in at 4.98%, we may not be able to do the deal.”

But GPA has become an attractive investment winning Triple B-minus and Double B-plus rating. This restores gpa to investment grade and improves its’ chances of fetching a favorable interest rate. 

READ the Fitch announcment on the Business Wire website HERE

Sanchez says they will go to market next week.

THE PUBLIC UTILITIES HAS APPROVED THE REFINANCE PROPOSAL THAT COULD ULTIMATELY AFFECT YOUR POWER RATES.

BUT CCU CHAIRMAN SIMON SANCHEZ SAYS THE APPROVAL COMES WITH LESS FLEXIBILITY THAN WHAT GPA WAS SEEKING.

GPA WAS ASKING TO REFINANCE AND RESTRUCTURE ITS DEBT FROM 1993 AND 1999. THIS COULD SAVE RATE PAYERS AS MUCH AS 9 MILLION A YEAR AND ROLL BACK THE RECENT RATE INCREASE THAT OCCURED IN MAY.

BUT SANCHEZ SAYS IT WILL BE DEPENDENT ON THE MARKET OVER THE NEXT WEEKS BECAUSE THE PUC INSISTS THAT THE INTEREST RATE FALL WITHIN A SET CEILING:

(SIMON CEILING-7AM)  “AND THEY SAID LOOK AS LONG AS YOU’RE BELOW 4.95 PERCENT YOU CAN DO THE DEAL. SO IF THE MARKET DOESN’T COOPERATE IN THE NEXT 9 DAYS AND IT COMES IN AT 4.98 PERCENT WE MAY NOT BE ABLE TO DO THE DEAL.”

BUT GPA HAS BECOME AN ATTRACTIVE INVESTMENT WINNING TRIPLE B MINUS AND A BB PLUS RATING.  THIS RESTORES GPA TO INVESTMENT GRADE AND IMPROVES ITS’ CHANCES OF FETCHING A FAVORABLE INTEREST RATE.

SANCHEZ SAYS THEY WILL  GO TO MARKET NEXT WEEK.