The Puerto Rico Sales Tax Financing Corp. has borrowed $250 million from First Bank, with proceeds from a future sales-tax bond deal set to repay the loan.
First Bank extended a $500 million line of credit to the corporation, called COFINA by its Spanish acrynom, according to Carlos Garcia, president of the Government Development Bank for Puerto Rico, which accesses the U.S. bond market on behalf of the commonwealth.
In addition to First Bank, the GDB may also extend loans to COFINA, with future bond sales refunding any loans the bank offers to the corporation.
“The GDB continues to provide advances as they may be needed, [as] there’s bonding capacity there,” Garcia said.
He said his team has not selected a time frame for when another round of COFINA bonds might head to the market.
“We’re not targeting right now on a specific date,” Garcia said. “We continue to monitor the market and when it makes sense, we will go to the market.”
COFINA sold $4.1 billion of subordinate sales-tax bonds on June 10 to help support operating expenses in fiscal 2009 and 2010 budgets and finance a $500 million local stimulus plan. Of that transaction, $1.1 billion was used to pay off a $500 million loan from First Bank and a $600 million loan from the GDB.