AFICA issues $21.6M bonds to finance Inter American University project
The Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (known as AFICA for its initials in Spanish) issued $21.6 million in new AFICA bonds to finance the construction and development of a new student housing complex, parking facility, and related facilities at the Inter American University’s San Juan campus.
Puerto Rico Fiscal Agency and Financial Advisory Authority Executive Director Christian Sobrino said the new AFICA bonds are not guaranteed by the Commonwealth of Puerto Rico nor any of its instrumentalities and that the payment of interest and principal of the AFICA bonds will be made solely by the Inter American University.
“This is the second AFICA bond issuance during the current 2019 fiscal year, which reflects that Puerto Rico continues to recover the investors’ trust as they are willing to invest their capital on educational projects in the island,” said Sobrino.
“Also, we are very pleased with the fact that this AFICA bond issuance will facilitate an investment of approximately $37 million by the Inter American University that will benefit the student community of its Cupey campus by providing them with new student dormitories and added parking availability,” he said.
This AFICA bond issuance has received an investment grade rating, which “not only reflects the good financial condition of the Inter American University but is a positive aspect for private sector financing in Puerto Rico,” he said.
This is the third time that the Inter American University has decided to use AFICA to finance a project and that in this case, an investment fund from California has elected to buy the complete bond issuance, which shows that there is private investor confidence in Puerto Rico, he added.
Regarding the project that is being financed through AFICA, Inter American University President Manuel J. Fernós said this financing represents a recognition by Standard & Poor’s that confirms through an A- credit rating, with a stable outlook, that this is the only institution with such a high long-term credit rating in Puerto Rico.
“This comes as a result of maintaining solid registration and retention rates, and sound operations, which is due in large part to cost reductions, expense control, absence of budget deficits and credit lines not being activated,” he said.
The construction of these facilities will expand the university’s internationalization project, since they will serve to house foreign students as well as local students from different municipalities.