presentaon to western states instuonal investors conference · guam regional medical city — $215...

Presenta(ontoWesternStatesIns(tu(onalInvestorsConference

LesterCarlson,PublicFinanceManager

GuamEconomicDevelopmentAuthority

Representa(vesfromGuam

1

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





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

6

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

7

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

8

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

9

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.

10

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

11

1.AsofDecember31,2013.2.Preliminaryandsubjecttochange.

PossibleNear‐TermFinancings

11

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

12

AcDveDutyMilitaryPersonnelincreasedfrom4,777in2012to5,866in2013andMilitaryDependentsonGuamincreasedfrom5,381in2012to7,483in2013.

Source:U.S.BureauofEconomicAnalysisasof2010.Note:DOD/JGPOofficialsonGuamhaveconfirmedthattheauthorizaFonsforoutsidethefenceinfrastructurearerestrictedfromuseunFlcertaincondiFonsaremet.ThecondiFonsincludethecompleFonoftheEACreportoninfrastructureandtheMasterPlanarecomplete.TheseacFonsareatnotexpectedtobecompletedunFlatleastauerthesigningoftheRODin2QFY2015.

MarineCorpsSpecialOpsTeamSettoArrive

12

“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

13

SiYu’osMa’ase!

14

ContactInforma(on

LesterCarlsonPublicFinanceManagerGuamEconomicDevelopmentAuthorityPhone:(671)647‐4316Email:[email protected]

presentaon to western states instuonal investors conference · guam regional medical city — $215...

Documents