The Guam Waterworks Authority sold $103 million of below-investment-grade revenue bonds in a deal that priced last week.
The authority was expected to close the transaction this week, taking possession of proceeds it needs to make capital improvements on the territory's water system. It agreed to a legal settlement with the U.S. Environmental Protection Agency, in which it agreed to make a number of water system improvements that will be financed with the bond proceeds.
With a track record of financial problems, the Guam Waterworks revenue bonds only garnered ratings of Ba2 from Moody's Investors Service and BB from Fitch Ratings.
The deal priced Dec. 1 with yields ranging from 4.37% for 2008 maturities to 5.44% for 2035 maturities, according to Thomson Financial.
Guam is a U.S. territory in the Pacific Ocean. Its bonds are "triple tax-exempt" - exempt not only from federal income tax but also state and local income taxes.
