Bangkok--20 May--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'B+' long-term rating to the government of Guam's (GovGuam) $275 million series 2009A general obligation (GO) bonds. At the same time, Standard & Poor's affirmed its 'B+' rating on Guam's existing GO debt. The outlook is stable.
"The rating continues to reflect our view of the general government's highly speculative-grade credit characteristics, including its massive historical budget imbalance and long-term liabilities, which have led to continuous operating cash flow pressure and a negative general fund balance position," said Standard & Poor's credit analyst Paul Dyson. "It also reflects our assessment of GovGuam's increased political willingness to establish a long-term plan to improve its financial position, including addressing its history of annual budget imbalance, as well as significant long-term liabilities. While our 'B+' rating is speculative grade and assumes that additional financial volatility exists, we believe that Guam will still meet debt service payments."
Management will use the proceeds to fund some of the items in a $275 million, legislature-authorized GO bond package that is part of a deficit-financing plan approved in the fiscal 2009 budget.
Guam, the westernmost U.S. territory, is the Marianas Archipelago's largest and southernmost island, as well as the largest of Micronesia's 2,000 islands. The island is nearly 3,700 miles west-southwest of Honolulu and 1,500 miles southeast of Tokyo.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Paul Dyson, San Francisco (1) 415-371-5079
Theodore Chapman, Dallas (1) 214-871-1401
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