Guam expects to bring $1.3 billion to market

Guam's government and public authorities expect to bring $1.3 billion in bonds to the market as early as this year.

The government announced its issuance plans at a bond symposium in New York City Wednesday.

Bonds to be supported by the general fund include a $500 million to build a GovGuam Medical Campus, $166.4 million in Simon Sanchez High School leaseback financing and $60 million for a prison.

Bonds from autonomous agencies are expected to include $375 million for the Guam Power Authority bonds, $100 million for the Guam Waterworks Authority and $100 million for the Port Authority of Guam.

Timing is uncertain and some bonds may be offered in 2027.

The Waterworks Authority also expects to sell $265 million bonds in fiscal year 2029.

Gov. Lourdes Leon Guerrero said she inherited a general fund deficit of over $80 million. She boasted that her administration has eliminated the deficit, gained an investment-grade rating for the island's general obligation bonds for the first time in 22 years, built up a rainy-day fund now approaching its goal and reduced annual debt service to $65 million from $92 million.

In an interview with The Bond Buyer, Leon Guerrero said a U.S. military build up on the island is expected to continue for the next 10 to 15 years, which supports the government's finances.

The U.S. sees Guam as the "second island" ? after the Philippines ? in any defensive action against China.

Fiscal year 2026 hotel occupancy tax revenue is expected to be about 27% less than it was in fiscal year 2019, according to Guam government data. However, this revenue is up about 175% from its low point in fiscal 2021.

Leon Guerrero said she expects tourism levels to reach 80% to 90% of pre-COVID-19 pandemic levels by the end of the fiscal year, Sept. 30. The island has an aggressive campaign to "rebrand," she said.

Guam is also diversifying its economy beyond tourism and the military, the governor said. It is seeking to build communications and computer chip industries.

The U.S. Department of War has promised to convene an Economic Adjustment Committee to help plan how to finance infrastructure, Leon Guerrero said. U.S. officials have made clear their willingness to provide support for Guam's infrastructure, as much of it supports the military presence there.

Investors frequently ask Guam about natural disasters, the governor noted. "Just recently, we were tested by Typhoon Sinlaku. While the storm was powerful, I am proud to report that Guam sustained only minimal damage to its critical infrastructure."