MARIANAS CREDIT RATING GOOD DESPITE HARDSHIP

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Public Lands department explores floating bond

By Gemma Q. Casas SAIPAN, CNMI Islands (Marianas Variety, Jan. 4, 2011) - Northern Marianas’ credit rating in the bond market remains good despite its economic crisis but floating another bond needs due diligence, according to Commonwealth Development Authority (CDA) Executive Director Manuel Sablan.

"So far, it’s good. No negative rating for the Commonwealth of the Northern Mariana Islands (CNMI), said Sablan. But to float a new bond they have to do a lot of due diligence."

The CNMI’s previous US$140 million bond which was floated to meet the local share in funding different capital improvement projects had been fully paid.

But US$60 million worth of bonds are still being paid every year.

The Department of Public Lands (DPL) is currently exploring the possibility of floating a new bond to pay landowners whose properties were taken for different public projects.

DPL Secretary Oscar M. Babauta said the department is conferring with the Legislature if this is feasible.

Sablan said CDA has not been consulted regarding this proposal.

The Commonwealth Development Authority is the government agency authorized to float a bond and deal with underwriters.

During the Babauta administration, CDA floated a US$40 million bond.

Of the amount, US$28 million was used to settle claims of landowners and several millions of dollars went to the federally funded prison project.

Sablan said although there’s already a precedent, floating a bond just to compensate landowners is a different issue because the previous one was done for the Community Improvement Plans.

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