Puerto Rico infrastructure financing arm issues $21.6 million in Universidad Interamericana bonds
California fund to buy full issuance to finance metro campus project
SAN JUAN — Puerto Rico’s Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym) announced Wednesday that the island’s Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority (Afica) issued $21.6 million in bonds to finance the construction and development of a new student housing complex, parking facility and “related amenities” for the Universidad Interamericana of Puerto Rico.
Afica issues revenue bonds and loans the proceeds to provide project financing to foster economic development.
Aafaf Executive Director Christian Sobrino pointed out that the bonds are not guaranteed by Puerto Rico or any of its instrumentalities and that the payment of their interest and principal will be made solely by the university.
“This is the second AFICA bond issuance during the current 2019 fiscal year, which reflects that Puerto Rico continues to recover the investors’ trust as they are willing to invest their capital on educational projects in the Island. Also, we are very pleased with the fact that this AFICA bond issuance will facilitate an investment of approximately $37 million by the Universidad Interamericana that will benefit the student community of its Cupey campus by providing them with new student dormitories and added parking availability. Governor Ricardo Rosselló Nevares has again shown his commitment to strengthen this important sector, the educational sector, which is an integral part of our social and economic growth,” Sobrino stated.
Sobrino said the issuance received an investment grade rating, “which not only reflects the good financial condition of the Universidad Interamericana but is a positive aspect for private sector financing in Puerto Rico.”
In addition, the official mentioned that this is the third time Universidad Interamericana has decided to use Afica to finance a project, and that in this case, an investment fund from California chose to buy the full issuance, “which shows that there is private investor confidence in Puerto Rico.”
Universidad Interamericana President Manuel J. Fernós said in the release that Standard & Poor’s “A-” credit rating, with a stable outlook, is evidence that the school is the “only institution with such a high long-term credit rating” on the island.
“This comes as a result of maintaining solid registration and retention rates, and sound operations, which is due in large part to cost reductions, expense control, absence of budget deficits and credit lines not being activated,” according to the release.
The construction of new facilities in the university’s metro campus, Fernós said, will expand the institution’s internationalization project, as these will also house foreign students.