That’s why Governor Albert Bryan Jr has announced the Matching Fund Securitisation Act which he hopes will create a significant revenue stream for the US Virgin Islands and reduce overall interest rates on the Territory’s current debt.
If the legislation is passed by the Legislature, it will allow the USVI to re-enter the international bond market for the first time in 11 years.
He explained that measures included in the Act can potentially create a revenue stream of US$85 million for each of the next three years.
Bryan said during an address to the nation in Tuesday that, “In plain language, we’re refinancing the existing debt to make monies available now. We are not using a penny extra."
“To be honest, this financial transaction is complicated, and it comes with a very tight time frame; however, it presents an opportunity that is too critical to overlook.”
The Governor has called the Legislature into Special Session to take action on his proposed legislation on Tuesday, August 18, 2020.
Bryan also said, “With this new revenue we can create a closely monitored revolving fund that will help us to get our projects moving faster."
“We also still owe many of our employees and retirees' money in retroactive pay and eight per cent. We have not forgotten. Ultimately the Legislature will have the purview to decide how this money is spent, but we must insist that the Government Employees Retirement System (GERS) be our utmost priority.”
The Governor said the securitisation of the Matching Fund Receipts is not an uncommon practice in the marketplace and has been used by other jurisdictions with great success.
Bryan wrote in his transmittal letter to Senate President Novelle Francis Jr., “Under current market conditions, the Virgin Islands Public Finance Authority is not able to restructure the outstanding matching fund bonds with a more traditional refunding bond structure and could not achieve the debt service savings that are expected to be achieved by this transaction."
As per Governor, his proposed Securitisation calculation is expected to decrease the overall debt service payments as soon as October 1, 2020, and approval of the measure by August 19, 2020, is vital to complete the Securitisation transaction before the next debt service due date.
