Puerto Rico plans to sell $600 million in Puerto Rico Electric Power Authority debt in mid-August, the commonwealth's first bond sale since last year.
David Chafey Jr., chairman of the board of the Government Development Bank of Puerto Rico, revealed these plans in an investor
PREPA was chosen as the first Puerto Rico government body to return to the bond market because among Puerto Rico government bonds the authority's bonds have the best bond rating besides COFINA sales tax bonds, Chafey said.
After the PREPA bonds are sold, Puerto Rico will sell general obligation bonds, Chafey said. After that, the Puerto Rico Highways and Transportation Authority plans to bond-out debt it owes to the GDB, in the process paying off this debt.
After presenting the government's fiscal 2014 budget, director of the Office of Management and Budget Carlos Rivas suggested that the projected budget figures might be too conservative. The government is working to find additional expenditure savings. Since it has not solidified these savings, it did not put them in the budget, he said.
The government's deficit is expected to decline 75% to $820 million in the current fiscal year from $3.3 billion in fiscal 2009, according to slides that accompanied the webcast.
Secretary of the Treasury Melba Acosta said the audited figures for fiscal 2012 would not be available until late August. They had been promised by July 31. Acosta said extra time was needed because of a record-keeping mess the new administration found when it came into office in January.
"In only six months, we have tackled several key challenges faced by Puerto Rico for decades to protect our investment grade ratings," the government said in the slide presentation. The key challenges included the retirement system's unfunded liability, the general fund deficit and the strained public corporations like PREPA and the Puerto Rico Aqueduct and Sewer Authority, the presentation said.
The slide presentation can be
