May 10, 2021

PR Headline News

Top Stories Without The Fluff

AAFAF seeks to refinance existing bonds of the Housing Finance Authority to generate savings in debt service

photo: Cybernews

San Juan – The executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), Omar Marrero Díaz, announced on Monday that the AAFAF, the Housing Financing Authority (AFV) and the Public Housing Administration ( AVP) will seek to refinance the current bonds of the AFV with the goal of generating savings in the service of their debt.

“Within our role as financial advisor to the Government of Puerto Rico and its instrumentalities, we have determined that it is in the best interest of the AFV, the AVP, and the People of Puerto Rico to take advantage of current market conditions and try to achieve savings in the service. of the existing public debt, ”indicated Marrero Díaz, who also serves as the main financial officer of the Government of Puerto Rico in written communication.

Currently, the AFV has approximately $ 300 million in outstanding bonds issued under the Capital Funds Program of the federal Department of Housing and Urban Development (HUD), with maturities between 2020 and 2027.

The AFV issued its bonds in 2003 and 2008 and loaned the proceeds of these issues to the AVP to make improvements and modernize public residential projects throughout the Island in accordance with the purposes of the federal program.

The principal and interest of such issued bonds are payable only from the federal funds appropriations made by the United States Congress each year for public housing modernization and improvement projects through HUD.

The bonds do not constitute a debt, obligation or promise of payment of the Government of Puerto Rico, its agencies, instrumentalities or public corporations.

The refinancing would be achieved through the issuance of new refinancing bonds this year under HUD’s Capital Fund Program.

At the time, the size, timing and structure of the anticipated transaction are subject to market conditions and other factors.

The issuance of the new refinancing bonds has the endorsement of the Fiscal Control Board and HUD.

In addition, the credit rating agency, Standard & Poor’s, has assigned an AA- rating to the bonds to be issued.

The AVP is responsible for the development and operation of the public housing units and receives grants and subsidies from HUD.

Its public policy is aimed at achieving a highly efficient administration with the north of improving the quality of life in public housing units, promoting community activity and the integral development of Puerto Ricans who live in said housing projects.

It is important to note that although the source of repayment of the bonds consists of HUD grants and subsidies, the reduction in debt service that would result from the proposed refinancing would result in more funds available to carry out AVP’s mission.

For its part, the AFV fulfills the purpose of providing financing and services to create and preserve affordable housing, and thus contribute to the socioeconomic development of Puerto Rico, providing financing options for low or moderate income families.

Source link