Pago Pago, AMERICAN SAMOA — The new Fono Building as well as the new high court building are the two major projects to be funded with revenue from a proposed 2021 Bond Series issuance approved by the American Samoa Economic Development Authority (ASEDA) board of directors last week.

A “Notice of Bonds To Be Issued”, published in the Samoa News yesterday, announced that the ASEDA board on Apr. 22nd adopted a resolution in which it authorized the issuance and sale of Series 2021 bonds.

BOND SERIES 2021A

The first one is General Revenue Bonds - Series 2021A bond - in an aggregate principal amount not to exceed $21 million to mature in not more than 20 years from their date or dates, to be sold at a price not less than 96% of the total principal amount thereof, and to bear interest at a maximum net effective rate or rates of not to exceed 6.5% per annum

This bond will be issued, according to the notice, for the purposes of:

•           financing any portion of the acquisition and construction of the new Fono building, including demolition, fixtures, furniture, equipment, parking and ancillary facilities, construction of a new high court facility and all related improvements, and a feasibility study on the relocation of the youth and adult correctional facilities - collectively referred to as the “Series 2021 Project”;

•           funding a deposit to a debt service reserve fund, if necessary; and

•           paying the costs of issuance of the Series 2021 Bonds. 

Break-down on how much each of the proposed projects is allocated under this bond is not publicly available but two lawmakers, who became aware of the approved ASEDA resolution, plan to seek more information and details of these projects before the bond goes on sale in the future.

Under current law, Fono approval is not required for future bonds and how revenues are spent. A Senate approved bill, now pending in the House, would require “prior” authorization from the Fono before ASEDA issues future bonds. ASEDA will also be required, under the Senate bill, to present to the Fono, projects to be paid by the bond proceeds and its plan for repayment prior to issuance of new bonds.

As previously reported by Samoa News, construction of the new two-story Fono building — which houses only the Senate and House chambers without offices of lawmakers — is slated to be completed in August 2022.

Initial project contract was just over $10 million but testimony by Public Works director Faleosina Voigt during a Senate committee hearing in February states that the price tag is now over $15 million. (See Samoa News edition Feb. 8th for details of the Senate hearing.)

The Fono building was one of the projects funded with the Series 2018 bonds. But the major issue now faced by the government is securing funds to construct offices for lawmakers.

For the proposed new high court building, the project broke-ground last November, and the former Lolo Administration gave the estimate cost of up to $7 million. So far, the area where the new building is to be built remains without activities, after the old Office of Communications Building was demolished.

OTHER ISSUES

According to the ASEDA notice, General Revenue Refunding Bonds, Series 2021B Bonds will be issued is an amount not to exceed $10 million for the purpose of refunding ASEDA’s outstanding General Revenue Bonds, Series 2015B; funding a deposit to a debt service reserve fund, if necessary; and (c) paying the costs of issuance of the Series 2021 Bonds.

Also proposed for issuance is General Revenue Refunding Bonds, Series 2021C an aggregate principal amount not to exceed $16 million for the purpose of: refunding ASEDA’s outstanding General Revenue and Refunding Bonds, Series 2015; funding a deposit to a debt service reserve fund, if necessary; and (c) paying the costs of issuance of the Series 2021 Bonds. 

According to the notice, the Series 2021 Bonds will be special limited obligations of ASEDA, payable solely from and secured solely by a pledge of the Revenues and certain funds and accounts established by the Indenture, including, but not limited to 100% of the Pledged Taxes; all net revenues from Projects financed with Bonds issued under the Indenture, and all revenues from any other source of funds legally available to the Issuer to pay debt service on bonds as more fully described in the Indenture.

Interested persons have the right to file any contest in the High Court of American Samoa within 20 days from the date of publication of the bond issue notice, which is Apr. 26 — in which other specific information is mentioned in the notice.

A copy of the ASEDA resolution is available at the ASG Treasury Department at the A.P. Lutali Executive Office Building.