After two years of staying away from such transactions, the Commonwealth is considering a sale of general obligation bonds sometime in 2011 to finance infrastructure projects, Government Development Bank President Carlos García said Tuesday.
While the government official did not say when the sale would take place or how much the agency is looking to raise, García told Bloomberg the administration’s plans also call for selling as much as $2.1 billion in other types of bonds next year.
By definition, GO bonds are municipal papers backed by the issuer’s “taxing power” rather than the revenue it may have available for the project it is looking to finance. GO bonds do not require collateral.
S&P classifies Puerto Rico’s GO bonds as “BBB-,” one notch above junk, effectively keeping the island from selling bonds. The last time the government carried out a GO bond sale was in September 2008, when the Acevedo Vilá administration raised $250 million.
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