i , : | z : In ferticular , we Authority mist payabject princi to the provisions whereby the Guam Power but the Government of Guam is forgiven the payment of interest to the . The 197 was a business loan to a failing public utility . The Secretary of Interior guaranteed the loan on the authority given him by the Onited States Congress and is liable to the Federal Financing Bank for the unpaid principal ard interest. Nonpayment af interest beyond December 31, 1980, as proposed by section 303, would leave the -- ~ We have been informed by officials of the Guam Power Authority that, with the approval by the Public Utility Conmissiaon of two rate-increases, the Guam Power Authority will be able to achieve a 2.0 ratio of income to debt service requirements that would make its long-term cbligations attractive to the private bond market. that such a ratio could be maintained, it is anticipated that within 10 years or less the Authority will be able to obtain private financing amd end its dependence on the Federal guarantee and loan. We understand that, for this reason, the Guam Power Authority would prefer a l0-year extension to the 30-year extensim contained in section 303, which Provides for the amortization of a principal. : an There is ample incentive for the Guam Power Authority to return to the private market as soon as possible. Theprivate tax free bond rates ahould be substantially less than comparable Federal rates. ‘Additionally, Guam Power Authority is very moch interested. in reestablishing its credit rating in order to reenter the private bond market for expansion financing. The Administration endorses the idea of a l0-year extension and proposes that the following language be substituted for the current language of section 303: ~ Bey m8 errArwe gl tae aac ae tes “a Bees 3032" Sectianr 22 ofthe Organic Act of Guam > (6§ gent. 3677%48 U.S.C. 1423a), as amended, is hereby amended by deleting all after the words "Decenber 31, ° 1980.", and substituting the following language: , wa Ae Rema57. au = a at woes BR aneaac 4, tad pep ! . ae y onl? acl oS bes he -? eT: y Laggan «oR ar. -_—- . Mas