Guam § 51102 - Authorization and Approval of Issuance, Terms and

§ 51102. Authorization and Approval of Issuance, Terms and

Conditions of Bonds of the Government for the Sole Purpose

of Achieving Debt Service Savings.

I Maga=lahen Guåhan [Governor of Guam]is authorized to

issue on behalf of the government of Guam one or more issues of

bonds of the government consisting of refunding bonds, subject to

the following requirements, limitations, terms and conditions,

which shall apply separately to each such issue of refunding

bonds:

(a) The issuance of the refunding bonds shall not cause

a violation of the debt limitation provisions of 48 USC 1423a

(§11 of the Organic Act of Guam).

(b) All obligations of the government to pay debt service

on, and the redemption price of, the prior bonds shall be

discharged concurrently with the issuance of the refunding

bonds. Thereafter, the prior bonds shall be payable solely

from and secured solely by an escrow established for such

purpose.

(c) The debt service savings resulting from the issuance

of the refunding bonds shall be not less than two percent

(2%); provided that such requirement shall not apply to

refunding bonds issued to refinance bonds issued pursuant to:

(i) Public Law No. 24-59, as amended, relating to

a loan made by the Bank of Guam to the Guam

Memorial Hospital Authority and

(ii) Public Law No. 25-72, as amended, relating to

a loan made by the Bank of Hawaii to the government

of Guam for the purpose of funding the voluntary

separation program.

(d) The aggregate amount of scheduled debt service on

the refunding bonds in each year to and including the final

maturity of the refunding bonds shall be less than or equal to

the maximum annual debt service on the prior bonds and the

final scheduled maturity date of such refunding bonds shall

be not more than five (5) years after the final scheduled

maturity date of the prior bonds.

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(e) The refunding bonds shall be payable from and

secured by all or any portion of the same source, or sources,

of revenues as the prior bonds refunded by the issue and the

amounts to be received under any financial contract entered

into under § 51105 of this Chapter, and shall not be payable

from or secured by any other source, or sources, of revenues,

except as may be authorized by statute. Any pledge or lien

on revenues or other monies authorized to be granted with

respect to the prior bonds refunded by the issue is hereby

authorized to be granted with respect to the refunding bonds.

If the prior bonds being refunded are general obligations of

the government, the refunding bonds shall be general

obligations of the government.

(f) If and to the extent that any refunding bonds are not

payable from and secured by the revenues of any autonomous

agency of the government that were pledged to secure the

related prior bonds, but are payable from and secured by a

pledge of revenues that would otherwise be deposited in the

General Fund, such autonomous agency shall pay to the

General Fund on the dates on which any moneys that would

otherwise be deposited in the General Fund are applied to pay

debt service on such refunding bonds an amount equal to the

lesser of (a) the amount of such moneys so applied to pay

debt service and (b) the amount of such autonomous agency

revenues available for such purpose.

(g) The proceeds of the refunding bonds may be used to

fund a bond reserve only:

(1) to the extent that moneys from any bond reserve

for the prior issue are transferred to the escrow from

which the prior bonds will be paid, and

(2) if the prior bonds had no bond reserve, in an

amount not greater than maximum annual debt service

on the related refunding bonds.

(h) The terms and conditions of the refunding bonds

shall be as determined by I Maga=lahen Guåhan [Governor

of Guam]by the execution of a certificate or indenture

authorizing the issuance of the bonds. The certificate or

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indenture shall contain terms and conditions that are

consistent with this Chapter, and shall include substantially

the same additional bond tests, rate covenants and other

covenants as were applicable with respect to the prior bonds.

(i) Any refunding bonds authorized by this Chapter shall

constitute valid and binding obligations of the government of

Guam. All officers charged by law with any duty in the

collection of any revenues from which debt service on the

issue will be payable shall do every lawful thing necessary to

collect the amount necessary for such purpose. The validity

of any such bonds shall not be affected by the validity or

regularity of any proceedings for the implementation of the

capital improvement projects funded by the prior bonds.

(j) Any appropriation of revenues or other moneys made

by the statute authorizing the issuance of the prior bonds is

hereby continued as an appropriation with respect to the

refunding bonds.

(k) Notwithstanding any substantive or procedural

provision of Chapter 6, Title 5, Guam Code Annotated, the

government of Guam waives immunity from any suit or

action in contract on the bonds authorized by this Chapter,

but does not waive sovereign immunity as to the personal

liability of elected officials and employees of the government

of Guam.

(l) The technical form and language of the refunding

bonds, including provisions for execution, exchange,

transfer, registration, paying agency, lost or mutilated bonds,

negotiability, cancellation and other terms, covenants or

conditions not inconsistent with this Chapter, and including

covenants relating to the collection of revenues, shall be as

specified in the certificate or indenture executed by I

Maga’lahen Guåhan [Governor of Guam] authorizing the

issuance of the refunding bonds. The certificate or indenture

may appoint one (1) or more trustees, or other fiduciaries

authorized to receive and hold in trust the proceeds of the

bonds and monies relating thereto, to protect the rights of

bondholders and to perform such other duties as may be

specified in the certificate or indenture. Trustees having

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possession or custody prior to November 20, 2001 of the trust

proceeds from the bond(s) being refunded shall remain as

trustees on refunding bonds without going through a new

procurement process. I Maga’lahen Guåhan [Governor of

Guam] is also authorized to execute, on behalf of the

government of Guam, any appropriate agreements,

certificates or other instruments relating to the bonds and the

sale of the bonds.

(m) I Maga=lahen Guåhan [Governor of Guam] is

authorized to enter into such contracts or agreements with

such banks, insurance companies or other financial

institutions as he determines are necessary or desirable to

improve the security and marketability of any issue of bonds

authorized by this Chapter. Such contracts or agreements

may contain an obligation to reimburse, with interest, any

such banks, insurance companies or other financial

institutions for advances used to pay principal of or interest

on the issue. Any such reimbursement obligation shall be

payable solely from the same sources as debt service on the

issue is payable, and any such advance, if necessary, shall be

treated as creating a reimbursement obligation issued to

refund the issue.

(n) No employee or elected official of the government

of Guam shall be individually or personally liable for the

payment of any amounts due on any bonds issued under this

Chapter, or for any other liability arising in connection with

the bonds; provided, however, that nothing in this Chapter

shall relieve any employee or elected official from the

performance of any ministerial duty required by law.

(o) 5 GCA § 50103(k) provides that agencies and

instrumentalities of the government of Guam shall issue

bonds and other obligations only by means of and through

the agency of the GEDA. No issue of bonds authorized by

this Chapter shall be sold until the Board of Directors of

GEDA has adopted a resolution approving the sale of such

issue.

(p) 5 GCA § 50103(k) also provides that GEDA shall

not sell any bonds without approval by I Liheslaturan Guåhan

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[Guam Legislature] of the terms and conditions of the

issuance of the bonds. I Liheslaturan Guåhan [Guam

Legislature] hereby approves the issuance, terms and

conditions of the bonds authorized by this Chapter.