Angel E. Dawson Jr., Executive Director of the Virgin Islands Public Finance Authority, spoke Wednesday about the territory's debt obligations and financing of the Virgin Islands Broadband Initiative before the 29th Legislature's Finance Committee.

As of the end of last month, the territory's general obligation debt stood at $785.4 million, he told legislators. 

The bonded indebtedness of the Public Finance Authority is currently at $125.5 million. Of that amount, $72 million stems from the 2004, 2009, and 2010 Diageo and Cruzan Matching Fund Bonds, and $53.5 million is to repay 1999, 2003 and 2006 Gross Receipts Taxes Bonds and other loans to the government. 

Director Dawson, who is also the Commissioner of Finance, said it is important to remember the bonds for the rum companies are to be paid from the revenues for each project. 

The Public Finance Authority is a public corporation and autonomous instrument of the Virgin Islands government. Its primary function is to help the government perform its fiscal duty, to raise public or private capital for essential projects, and to create programs that serve the financing needs of Virgin Islanders. The PFA is under the control of the governor, and performs duties consistent with the governor’s mandates and directives as they are adopted by the authority’s board of directors. The board is chaired by the governor, with the territory's Finance Commissioner serving as executive director, and the director of the Office of Management and Budget as secretary. Four private citizens are also appointed by the governor and confirmed by the legislature to serve four year terms. 

Director Dawson told Finance Committee members he is “pleased and proud to announce” that Fitch Ratings recently affirmed a BBB+ rating on Virgin Islands Matching Fund Senior Lien Bonds, and affirmed BBB status on Matching Fund Subordinate Lien Bonds and the Diageo and Cruzan bonds.

He also took the opportunity to update members of the Senate on recent progress in funding the Virgin Island Next Generation Network, a wholly-owned subsidiary of the PFA. The law that set in motion the initiative authorizes the PFA to borrow up to $38,000,000 to implement the Broadband Expansion Project that will bring high-speed Internet service to the Virgin Islands. 

On April 29 of this year, the Authority closed on a $32,235,000 bond with Banco Popular de Puerto Rico, an interim financing measure which is anticipated to be refinanced with a long-term bond issued later this year.

The authority's board has not yet approved a fiscal year 2012 operating budget. But Director Dawson said that “in the spirit of austerity,” he anticipates the budget to be lower than the current year's $7.3 million.

The authority's budget is funded by the Internal Revenue Matching Fund and from the PFA's Project/Administration Fund. The Board of Directors sets operating expense funds and priorities every August.