Public Finance Corp. completes $410M bond issue
The Puerto Rico Public Finance Corporation placed and sold $410 million in bonds in the local market, the proceeds of which the agency will use to refinance existing debt and save $6.6 million in interest payments.
Government Development Bank President Juan Carlos Batlle said Wednesday a total of $422 million retail orders and $122 million in institutional orders were received during the three-hour sale period. The $544 million total demand represented 33 percent more than what was available for sale, he said.
“The high demand for the [PFC’s] bonds is another example of the strong support bondholders have given to the [Gov. Luis] Fortuño administration,” he said. “It is also clear evidence that contradicts the recent claims of some politicians who have tried to mislead the people of Puerto Rico by saying we have lost access to markets or we are paying higher rates than in 2009.”
“The issue of Puerto Rico’s credit and access to capital markets is serious and should not be used to confuse by making baseless claims,” he said. “You have to be transparent and honest when making comments that can have an impact on Puerto Rico’s reputation or good name in the capital markets.”
Bonds with maturity terms expiring in the year 2015 were sold at a 3.10 percent interest rate, while those with the longest maturity terms expiring in 2031 locked in a 5.35 percent interest rate. The average cost of the transaction was 4.75 percent.
“A similar transaction in late 2008, would have cost about 6.50 percent, which once again proves that Puerto Rico is paying less today for its debt than what it paid in 2008. The numbers speak for themselves,” Batlle said.
The GDB’s and PFC’s boards approved the transaction.