presentaon to western states instuonal investors conference · guam regional medical city — $215...
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Presenta(ontoWesternStatesIns(tu(onalInvestorsConference
LesterCarlson,PublicFinanceManager
GuamEconomicDevelopmentAuthority
Representa(vesfromGuam
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GuamEconomicDevelopmentAuthority
HenryTaitanoAdministrator
LesterCarlsonPublicFinanceManager
HenryCruzEconomist
BureauofBudget&ManagementResearch
JohnRiosAdministrator
IndicatesSpeaker
HafaAdai!
OverviewofGuam
■ GuamisgovernedbyanelectedGovernorandLieutenantGovernor,15Senatorsandanappointedjudicialbranch
■ IncometaxesarepaidtotheGovernmentofGuaminsteadoftheU.S.Treasury
■ PopulaFonasofApril2010wasesFmatedtobe159,358
■ Guam’sGDPmeasured$4.76billionfor2012upfrom$4.55billionin2010
■ MostofGuam’sbondsaretriple‐taxexemptinallU.S.statesandterritories
■ AllbondissuanceiscentralizedthroughtheGuamEconomicDevelopmentAuthority(“GEDA”)
GuamisanunincorporatedorganizedterritoryoftheUnitedStatesandastrategicU.S.militarypostintheWesternPacific
Source:USBureauofEconomicAnalysis 2
Tourism
2013wasabanneryearfortourism StronggrowthinvisitorsfromKorea,Taiwan,ChinaandRussia
Guam’sshareofthetotalJapaneseoutboundtouristmarketincreasedto5.11%in2013
AddiFonalhotelsexpectedtoopenin2014 IncreasedmarkeFngeffortshavehelpedtodiversifyGuam’stourismmarket
Construc(on
$467millionofbuildingpermitsissuedCY2013(28%increaseYOY)
GuamRegionalMedicalCity— $215millionprivatehospitalexpectedto
open2014 DusitThaniHotel
— $110million400roomluxuryhotel Improvementsatairportandport
EconomicUpdateGuam’seconomyconFnuestogrowandaddiFonaleffortstoincreasetourismhaveresultedinadiversificaFonofthetourismmarket
Source:GuamEconomicDevelopmentAuthority 3
BusinessDevelopment
InterestfromvariousinvestorsinuseofEB‐5program
AddiFonsofnaFonalchainrestaurantsandretailers JackNicklausGolfAcademy
$89.5millionsolarfarmexpectedtobeinoperaFonin2014
GEDAisacFvelypursuingtradewithHongKong
VisitorArrivalsasaPercentofTotalArrivalsGuam’svisitormarketcon(nuestodiversify
0%
20%
40%
60%
80%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014YTD*
(%ofTotal)
FiscalYearJapan Korea Taiwan U.S.A. CNMI Micronesia Philippines Other
MonthlyVisitorArrivalsVisitortraffichassteadilyincreased
HotelOccupancyandAverageRoomRatesOccupancyandaverageroomratesarethehighestin10years
GVBVisitorProjec(onsGVBprojects1.51millionvisitorsby2018
FiscalYear ProjectedVisitors ProjectedTotalSpend
2014 1.34million $2.58billion
2015 1.38million $2.66billion
2016 1.42million $2.74billion
2017 1.46million $2.82billion
2018 1.51million $2.91billion
TourismUpdate
FY2014visitorarrivalsareontracktomatchFY2013’srecordsekngtotalof1.34millionvisitors
Source:GuamVisitorsBureau,GuamHotel&RestaurantAssociaFonand2012GuamComprehensiveAnnualFinancialReport.*Preliminary. 4
52%58%
62% 61%66% 65%
60%70%
70%76%
88%
$89$92
$106 $106$111
$115$108 $111 $114
$123
$140
708090100110120130140150
50%
60%
70%
80%
90%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Rate($pernight)
Occup
ancyRate(%
)
CalendarYearOccupancyRate AverageRoomRate($pernight)
GovernmentofGuamCredits
GeneralObliga(on ParOutstandingSeries2007 $151,935,000Series2009 257,040,000
LimitedObliga(on ParOutstandingBusinessPrivilegeTax("BPT")
Series2011 $235,000,000Series2012B‐1 81,325,000Series2012B‐2(Taxable) 27,375,000Series2013 21,340,000
Sec(on30BondsSeries2009 $193,010,000
HotelOccupancyTaxBondsSeries2011 $85,470,000
OtherObliga(ons ParOutstandingCer(ficatesofPar(cipa(on
Series2010JFKHighSchool $63,695,000
CompactImpactFundsSeries2006GEFF $34,595,000Series2008GEFF 4,220,000
RevenueBondDebt ParOutstandingGuamInterna(onalAirportAuthority
Series2013A $14,620,000Series2013B 33,675,000Series2013C 199,040,000
GuamPowerAuthoritySeniorLien
Series2010 $150,440,000Series2012 340,510,000
SubordinateLienSeries2010 $27,300,000
GuamWaterworksAuthoritySeries2005 $88,485,000Series2010 118,825,000Series2013 172,630,000
GuamEconomicDevelopmentAuthorityTobaccoBondsSeries2007 $33,575,000
5AsofDecember31,2013Source:GEDA.Doesnotincludebankloans
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RecentGuamAchievementsGovernorCalvo’sfocusonfiscalresponsibilityandeconomicdevelopmenthasledtoanumberofsignificantaccomplishments
RecentGuamRa(ngDevelopmentsGeneral
Obliga(onBusiness
PrivilegeTax Sec(on30GuamWaterworks
AuthorityGuamPowerAuthority
Ra(ngAc(on
Upgrade InauguralCredit(2011) Upgrade
Upgrade/Posi(veOutlook
Upgrade
S&PUpgradetoBB‐
S&P:A Fitch:A‐
S&PUpgradetoBBB+
S&P:A‐ Moody’supgradetoBa1Pos.Outlook
FitchPos.Outlook
Moody’sUpgrade(Baa3)
GovGuamrecentlyachievedaCerFficateofAchievementforExcellenceinFinancialReporFng
− “Itshowsincreasedprofessionalism”–JeffreyEsser,GFOAExecuAveDirector NaFonalfinancialmediarecogniFonwithtworecentBloombergArFcles
− “The[BPT]debtisrankedAbyS&P,sixth‐highest.That’sthesamelevelasCalifornia’sGObonds”1.
1.BrianChappapa,“GuamRallyonFiscalGainsDefiesPuertoRicoCuts:MuniCredit,”BloombergL.P.,February25,2014Source:GovGuam,GEDA&Bloomberg.
“Guambondsarebea(ngtheen(remunicipalmarketin2014forthefidh(meinsixyears”–BrianChappaga,“GuamRallyonFiscalGainsDefiesPuertoRicoCuts:MuniCredit,”BloombergL.P.,February25,2014
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GeneralFundTheCalvoAdministraFon’siniFaFveshaveresultedintangiblebenefitswhichhavehelpedtobuildposiFvemomentuminimprovingfiscalcondiFons
Ini(a(ve Result
ImprovedManagement
IncreasedtransparencyincludingregularmeeFngswithinvestorsandraFngagencies Provenabilitytocontrolspending
EliminateGeneralFundDeficit
FY2012endedwithabudgetsurplusforthefirstFmein15years–$30.2millionsurplus
GeneralFundliabiliFeshavebeenreduced
AchieveOpera(ngBalance
Highestrecordedrevenuesin15yearsapributabletoincreasedtaxcollecFons ReducFoninoperaFngexpendituresalongwithgovernmentalreorganizaFonfor
improvedefficiencies
ReduceUnpaidTaxRefunds
Allpast‐duetaxrefundshavebeenpaidforthefirstFmeintwodecades Allcurrent‐duerefundsarebeingpaidonFme
AchieveRecurringBudgetaryBalance
FY2012andanFcipatedFY2013surplus FY2015proposedbudgetprojects$59millionincreaseinrevenues
IncreaseEconomicDevelopment
GovernorCalvoconFnuestomaketheChinaVisaWaiverapriority UndertheCalvoadministraFontourismhashadtwoconsecuFvebanneryears IncreasedpresenceattrademissionsishelpingtodiversifyGuam’svisitorbase Governor’sTourism2020IniFaFve
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RevenueSource
3%oftheGovernment’sexisFngBPTRevenues,a4%taxonbusinessreceiptswhichaccountsforapproximately1/3ofGeneralFundrevenues
LegalStructure
FirstlienonpledgedBPTrevenues Monthlyset‐asideof1/6interestand1/12
principaldepositedintobondfund Depositsarefundedthreemonthsin
advancesothat100%ofdebtservicepaymentsareondepositthreemonthspriortodebtservicepaymentdates
Addi(onalBondsTest
3.0xMADSforanyconsecuFvetwelvemonthperiodduringthe24monthsnextprecedingissuance
PrincipalPaymentDate
January1 November15(Series2013C)
Exis(ngDebt
Series2011A‐$235.0million Series2012B‐$108.7million Series2013C‐$22.6million— UsedtorefundoutstandingG.O.bondsfor
savings
BreakdownofBPTCollec(onsbySector
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
Insurance4% Other
7%
Rentals7%
Construc(on10%
Services24%
Retail48%
BusinessPrivilegeTax(“BPT”)TheBPTisacomprehensivetaxongoods,servicesandthesaleoftangiblepropertyandoneofGuam’sstrongestrevenuesources
TotalHistoricalBPTCollec(ons(FY2002‐2012)
Source:GovernmentofGuamauditedfinancial.
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
2008 2009 2010 2011 2012FY
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RevenueSource Hoteloccupancytax
LegalStructure
AllHOTrevenuesreceivedbytheGovernmentareimmediatelysubjecttoalienofanIndenturedatedApril1,2011
HOTrevenuesarecollectedbytheGovernmentanddepositedintotheRevenueFundtoprovideforamonthlysetasideofdebtservice,rebate,reserveandbondexpenseamounts
Addi(onalBondsTest
1.8xMADSforanyconsecuFvetwelvemonthperiodduringthe24monthsnextprecedingissuance
RateCovenant
TheGovernmentcovenantsthatitwillimpose,levy,enforceandcollectHOTrevenuesinanamountequaltoatleast125%ofAggregateAnnualDebtServiceforsuchBondYear
PrincipalPaymentDate November1
HistoricalHotelOccupancyTaxRevenues(FY2008‐2012)
6.5%CAGR
Top10HotelsbyNumberofRoomsHotel NumberofRooms
PacificIslandsClub 777
HiltonGuamResort&Spa 645
OutriggerGuamResort 600
GuamPlazaHotel 505
HotelNikkoGuam 492
HyapRegencyGuam 450
WesFnResortGuam 432
OnwardBeachResort 430
GuamReef&OliveSpaResort 422
GuamMarriopResort 380
HotelOccupancyTax(“HOT”)
HotelOccupancyTaxhasbeenleviedsince1971andhasbeenatitscurrentrateof11%since1995
Source:GovernmentofGuam.
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RevenueSource SecFon30Revenues
LegalStructure
FirstlienonSecFon30RevenuescollectedbytheTrusteeandimmediatelydepositedintotheSecFon30RevenueFund
MajorityofSecFon30Revenues(IncomeTaxcomponent)isreceiveddirectlyfromtheU.S.GovernmentonoraboutOctober1steachyear
CashfundedreservefundatMADS
Addi(onalBondsTest
2.0xthelesserof(i)mostrecentfiscalyearrevenuesor(ii)averageofthethreemostrecentfiscalyearrevenues
PrincipalPaymentDate December1
HistoricalSec(on30Revenues(FY2008‐2012)
Composi(onofSec(on30Revenues
FederalincometaxesderivedfrommilitarypersonnelandfederalcivilserviceemployeesonGuamorwhoindicateGuamastheirstateoflegalresidence(“homeofrecord”)
Passportfees
ImmigraFonfees
NaturalizaFonfees
5.8%CAGR
Source:GovernmentofGuam.
LimitedObliga(onSec(on30TheGovernment’srighttoreceiveSecFon30RevenuesisgrantedbySecFon30oftheOrganicActandGovGuamhasbeencollecFngSecFon30Revenuessince1978
Guam’sRevenueBondCreditsGuam’srevenuebondcreditsincludetheisland’ssolecivilianuFlityproviders(electricity,waterandwastewater)andtheisland’sonlycommercialairport
[]GuamPowerAuthority
(“GPA”)GuamWaterworksAuthority
(“GWA”)
GuamInterna(onalAirportAuthority
(“GIAA”)
Overview
Electricsystemincludes28substaFons,175milesoftransmissionlines&over645milesofdistribuFonlines
Netcapacityof537.8MW
ProvideswatertoallofthecivilianpopulaFonofGuamandsewerservicetoalargepercentageofthecivilianpopulaFon,theAirForcebaseandseveralNavyfaciliFes
OnlycommercialairportontheIsland
Passengertrafficisata15yearhigh
NewdutyfreeretailconcessionagreementwithLopeDutyFree
Moody’s SR:Baa3(Sta.)Sub:Ba1 Ba1(PosiFve) Baa2(Stable)S&P SR:BBB(Sta.)Sub:BBB‐ A‐(Stable) BBB(Stable)Fitch SR:BBB‐(Sta.)Sub:BB+ BB(Pos.) NR
TotalDebtOutstanding1.
Senior–$430.95million Subordinate‐$27.3million
$379.94million $247.335million
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1.AsofDecember31,2013.2.Preliminaryandsubjecttochange.
PossibleNear‐TermFinancings
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1.AsofDecember31,2013.2.Preliminaryandsubjecttochange.
DepartmentofEduca(on
EvaluaFngfinancingopFonsforrepairsorreplacementofvariousDepartmentofEducaFonfaciliFes
− ExisFngpubliclawsandpendinglegislaFonspecificallyprovideforvariousDOEfundingalternaFves
GuamPowerAuthority
Currentcapitalplanprojects2014bondissuetofundupto$75millioninnear‐termneeds
GuamWaterworksAuthority
GWAanFcipates2015bondissuetofundremainingprojectsinits5‐yearCIP
2014Na(onalDefenseAuthoriza(onAct
Allocates almost $495 million in spending for construcFon projects onGuamincluding:
$85.6 million for a USMC aircrau hangar at Andersen AFB whichdirectlysupportstherealignmentofMarinesfromOkinawatoGuam
Allows use of $114 million of Government of Japan funds for siteimprovementprojectsaswellasunlimiteduseforplanninganddesignoffutureprojects
Authorizes$176millionforselecFvehardeningoffaciliFesatAndersenAirForceBasetosupportthePacificAirpowerResiliency(PAR)program
Authorizes $128 million for a fully hardened Fuel Systems Hangar atAndersenAirForceBase
MarineCorpsSpecialOperaFonsCommandwillbearrivingonGuam “ThedeploymentherewillprovideMARSOCuniqueopportuniAestotrainintheregionwhilestrengtheningtheMarineCorps’relaAonshipwiththepeopleofGuam”–ColonelPhillipZimmerman
UpdateonMarineReloca(on&DODProjects
IniFalfundingfortheMarinerelocaFonfromOkinawahasbeenapproved
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AcDveDutyMilitaryPersonnelincreasedfrom4,777in2012to5,866in2013andMilitaryDependentsonGuamincreasedfrom5,381in2012to7,483in2013.
Source:U.S.BureauofEconomicAnalysisasof2010.Note:DOD/JGPOofficialsonGuamhaveconfirmedthattheauthorizaFonsforoutsidethefenceinfrastructurearerestrictedfromuseunFlcertaincondiFonsaremet.ThecondiFonsincludethecompleFonoftheEACreportoninfrastructureandtheMasterPlanarecomplete.TheseacFonsareatnotexpectedtobecompletedunFlatleastauerthesigningoftheRODin2QFY2015.
MarineCorpsSpecialOpsTeamSettoArrive
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“Guamisbeingtappedtoplayakeyroleinthere‐balancingofmilitaryforcesinthisregion.WetakethisdutyveryseriouslyandwewelcometheMarinestotheirnewhome.”–GovernorEddieBazaCalvo
UsefulGuamWebsites
EconomicInforma(on
GEDA www.investguam.com
GuamChamberofCommerce www.guamchamber.com.gu
VisitorIndustry
GuamVisitor’sBureau www.visitguam.com
GuamHotel&RestaurantAssociaFon www.ghra.com
FinancialInforma(on
GovernmentofGuam www.admin.gov.gu
OfficeofthePublicAuditor www.guamopa.com
GuamAutonomousAgencyIssuers
A.B.WonPatInternaFonalAirport,Guam www.guamairport.com
GuamWaterworksAuthority www.guamwaterworks.org
GuamPowerAuthority www.guampowerauthority.com
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SiYu’osMa’ase!
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ContactInforma(on
LesterCarlsonPublicFinanceManagerGuamEconomicDevelopmentAuthorityPhone:(671)647‐4316Email:[email protected]