Guam Bond ratings downgraded
Guam – Standard and Poor’s has downgraded Guam’s bond ratings. A new ratings criteria that affects 800 different bond credits in the market has caused numerous municipal governments’ credits to be lowered. This new criteria set by S&P Global is a change in criteria for rating priority-lien tax revenue debt where the pledged revenue stream was typically treated as limited obligation.
Guam Economic Development Authority Administrator Jay Rojas says he was disappointed in S&P’s decision to change its criteria for bonds, saying quote “we question the reliability of this new ratings criteria as what was once seen as a financially strong credit has been reclassified based on their new criteria.” The GovGuam limited obligation Section 30 bond rating has now been lowered from BBB+ to BB. The Hotel Occupancy Tax or “HOT” revenue bond credit was lowered from A- to BB.
The Business Privilege Tax bond credit was lowered from A to BB. The new ratings, however, will not have any effect on Guam’s outstanding HOT, Section 30 or BPT bonds, as those bond interest rates were locked in at the time of sale. This new rating however, will affect any future borrowing efforts pledged by these revenues by the Government of Guam.
https://pacificnewscenter.com/guam-bond-ratings-downgraded/
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