In particular, we cbject to the provisio
ns whereby
Guam Power
Authority mast pay principal and inte
rest to the Uonement of mam
but the Govermment of Guam is forgiven
the payment of interest to the
December 31, 1980, as proposed by section 303 would lea
th
Secre
tary of the Interior with a liability for which no fundsare
appropriated.
Wille we support an extension, we object strenuously
to the nonpayment of interest provision of section 303.
We have been informed by officials of the Guam Power Authority that,
with the approval by the Public Utility Commission 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 ebligations attractive to the private bond market. Assuming
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 quarantee and loan. We widerstanéd
that, for this reason, the Guam Power Authority would prefer a l0-year
extension to the 30-year extension contained in section 303, which
“
provides for the amortization of a principal.
There is ample incentive for the Guam Power Authority to retin to the
Private market as scon as possible.
‘The private tax free bond rates
should 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 10-year extension am proposes
that the following language be substituted for the current language of
section 303:
+
MOM
ec Frm gl Tae
cae a te
8
eo
wee
Sec. 3037" Sectimr 32 ofthe Organic Act of Guam
> (6% Seat. 387y"48 U.S.C. 1423a), as amended, is hereby
grended by deleting all after the words “Decenber 31,
1980.", and mbetituting the following Language:
iran
:
- eg
:
&
.
.
~s
ed
so
y
ams
[ao
.
“7
Me
sR
oe ee,
Mete
cued
ie “
moe