Guam § 90 - Use of Tax-Exempt Bond, Taxable Bond, and Other

§ 90. Use of Tax-Exempt Bond, Taxable Bond, and Other

Financing Instruments for Financing.

(a) To minimize the financing cost to the Government of

Guam, financing utilized by the contractor/developer to fund the

design, construction, and maintenance of the Department of

Corrections shall be through tax-exempt obligations, taxable bond

obligation, or other financial instruments; provided, such

financing is available at interest rates determined by the Guam

Economic Development Authority to be reasonable and

competitive. The Guam Economic Development Authority shall

be the issuer of any financial instruments or obligations unless the

Guam Economic Development Authority waives its right to serve

as the issuer of financial instruments or obligations. Alternatively,

the contractor may use an alternative method of financing,

including, but not limited to, a short-term debt, mortgage, loan,

federally guaranteed loan or loan by an instrumentality of the

United States of America if such financing will better serve the

needs of the people of Guam. Such alternative financing shall be

approved by I Liheslaturan Guåhan. The purpose for the

requirements of this Section is to assure that the Government of

Guam pays the lowest possible interest rate so that the cost of the

Government of Guam’s financing of the design and construction

of the Department of Corrections, amortized through the lease-

back payments from the Government of Guam to GEDA and or

the contractor/developer, will be lower than regular commercial

rates.

(b) I Liheslaturan Guahan, pursuant to § 50103(k) of

Chapter 50, Title 12, Guam Code Annotated, hereby authorizes

the Guam Economic Development Authority to issue one or more

additional series of tax-exempt and/or taxable obligations (in any

case, the “bonds”) for the purpose of financing the Department of

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Corrections Adult Correctional Facility, in an aggregate principal

amount not to exceed Eighty Million Dollars ($80,000,000) for

the following purposes:

(1) to finance the design, construction, and/or the

maintenance of the Department of Corrections Adult

Correctional Facility;

(2) to fund a deposit to a debt service reserve fund;

(3) to fund capitalized interest with respect to the bonds;

and

(4) to pay expenses relating to the authorization, sale,

and issuance of the bonds, including without limitation,

printing costs, costs of reproducing documents, credit

enhancement fees, underwriting, legal, feasibility, financial

advisory and accounting fees and charges, fees paid to banks,

or other financial institutions providing credit enhancement

fees, costs of credit ratings and other costs, charges and fees

in connection with the issuance, sale, and delivery of the

bonds, subject to the following additional conditions:

(A) The terms and conditions of the bonds shall be

as determined by the Guam Economic Development

Authority by the execution of a certificate, trust

agreement or indenture authorizing the issuance of the

bonds; provided, however, that such terms and

conditions shall be consistent with this Section, that the

bonds shall have a final maturity not to exceed thirty

(30) years; and an interest rate not to exceed seven

percent (7%).

(B) No bonds authorized by this Section shall be

sold until the Board of Directors of Guam Economic

Development Authority has approved the sale by

resolution, as provided in Chapter 50 of Title 12, Guam

Code Annotated.

(C) The issuance of bonds pursuant to this Section

shall not be subject to the approval of the voters of

Guam.

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