The Virgin Islands Public Finance Authority posted a preliminary official statement for $219 million in bonds on MuniOS.
The islands' government has been saying it would be selling bonds since the early summer, when it said the amount would be about $1 billion. The proposed value has steadily declined.
Whereas the Virgin Islands Legislature had wanted the bonds to include $100 million to replenish the government pension system, Gov. Kenneth Mapp is choosing to not borrow any money for this purpose. Instead the bonds will be used for operating expenses.
The bonds will be split between $145 million senior lien and $74 million subordinate lien matching fund revenue bonds. These bonds are paid back through taxes on Virgin Islands rum sold in the United States.
The senior lien bonds are rated BB by S&P Global Ratings and Fitch Ratings and B1 by Moody's Investors Service.
The subordinate lien bonds are rated BB-minus by S&P, BB by Fitch, and B2 by Moody’s.
Morgan Stanley is the lead underwriter on the deal and Jefferies is the junior underwriter.
The senior bonds will have serial maturities 2017 to 2033 and term maturities 2034 to 2036. The subordinate bonds will have $1.2 million due in 2017, $5.2 million due in 2018 to 2030, and $17.5 million due in 2031 to 2035.
According to the 640 page POS, Standard International Group is the issuer's financial advisor.
A source involved in the deal said it hadn't yet been decided when the bonds would be brought to the market.
