The Puerto Rico Government Development Bank has sold $110 million in notes to a public corporation in a step to increase its liquidity.
GDB interim president José Pagán Beauchamp announced the sale to the Puerto Rico State Insurance Fund Corporation on Thursday night. The notes have 8% coupons.
Of the $110 million being lent to the GDB, $40 million is to mature Dec. 1, 2017, $30 million is to mature on Dec. 1, 2018, and $40 million is to mature Dec. 1, 2019. The notes may be redeemed in whole or in part before maturity at the option of the GDB. Redemption would be at principal plus accrued interest.
"This transaction is part of our previously announced strategy to bring commonwealth deposits to the GDB," Pagán said. "It achieves two objectives simultaneously - increasing GDB's liquidity and improving the cash flow of the State Insurance Fund. Combined with fiscal reforms recently signed into law that will strengthen the teachers' pension system, today's announcement reflects another step in improving the commonwealth's near-term economic situation and long-term economic outlook."