The United States Virgin Islands plans to sell a $40 million revenue anticipation note to Banco Popular to help it get through the fiscal year ending on Sept. 30.
The Virgin Islands is undergoing a financial crisis and its government has said more than once this year that it was concerned about its ability to meet payroll this spring.
The $40 million note would be 5.5% of the current $720 million approved budget.
The government says Banco Popular has signed a commitment letter to provide the RAN. The note has an expected maturity of nine months and a term of 12 months, according to a government spokesman. It will amortize on a 24 month schedule and will be paid off with property taxes.
On Wednesday Gov. Kenneth Mapp said he expected the government would have enough money to avoid employee furloughs or reductions in hours worked through June 30.
The government said that it plans to make a "major effort" to collect more than $100 million in delinquent commercial and residential property taxes.
Mapp said he planned to submit a balanced fiscal year 2018 budget that doesn't include long-term working capital deficit financing.
The Virgin Islands government has about $1.9 billion in outstanding bonds. The Water and Power Authority has additional bond debt outstanding. The rating agencies now rate all of this debt with speculative grades.
