AMERICAN SAMOA MUNICIPAL BONDS GO ON SALE

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By Fili Sagapolutele

PAGO PAGO, American Samoa (June 29, 2000 PIDP/CPIS)---American Samoa Government (ASG) municipal bonds worth $18 million and carrying an interest rate of 5.86 percent went on sale Tuesday on the U.S. mainland, said Governor Tauese Sunia.

The new ASG bonds are classified as "municipal bonds," which means that the interest paid on the bonds is not subject to federal income tax.

The American Samoa Finance Committee, which consists of the Governor, Lieutenant Governor Togiola Tulafono and Treasurer Ale Tifi Ale, approved the bond sale, which is being conducted to pay off three existing loans that the ASG has outstanding at much higher interest rates.

The debts which will be refinanced are the 1988 Executive Office Building Bonds - $7,560,000 outstanding at 10.125 percent; the 1992 Retirement System Loan - $2,476,559 outstanding at 8.1 percent; and the 1998 Retirement System Loan - $8,539,586 outstanding at 8.5 percent.

The low interest rate on the refunding bonds will save the ASG about $365,000 a year in debt service payments over the next eight years. After factoring in the costs related to the bond sale, the ASG will save $1,890,975 in debt service over the life of the bonds.

"It’s been a long, hard journey, but the benefits make all the hard work worthwhile," the Governor stated. "This achievement has been a true ‘total team effort’ and has required constant forward movement and never letting up.

"We have overcome odds, obstacles and opposition to obtain substantial savings for the government," he added.

"The willingness of the American Samoa Government Employees Retirement Fund to guarantee payment of the bonds was a key element in completing the package and I want to express my sincere thanks to the Trustees," the Governor continued.

The bond sale was approved by the territorial Legislature in late March over great skepticism but Tauese said lawmakers saw this proposal made "good business sense."

Seattle-Northwest Securities, which is the largest regional bond company in the Northwest is underwriting the bonds, while American Capital Assets of New York is providing bond insurance. ASG said five large firms are selling the bonds.

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