GWA seeks approval for $350M bond issuance to enhance water system operations

The Guam Public Utilities Commission (PUC) convened on June 26, 2025, to discuss significant financial matters concerning the Guam Waterworks Authority (GWA) and its upcoming bond issuance. The meeting focused on the approval of long-term debt and the implications of the bond issuance process.

The session began with a clarification that the discussions pertain only to projects not already excluded from the Contractor View Protocol. GWA was requested to provide the PUC with detailed information regarding the total interest costs and other relevant aspects of the bond issuance once the process is complete.

A key agenda item was the approval of bonds, which included a comprehensive review of every bond issuance since February 2005. The proposed bond issuance is set to authorize borrowing up to $350 million, with specific provisions outlined in the eleventh and twelfth supplemental indentures, which require prior review and approval from the PUC.

During the meeting, GWA representatives highlighted the current market conditions, noting that interest rates are less favorable compared to previous issuances. They emphasized their commitment to marketing the bonds effectively to attract institutional investors, aiming to reduce the total interest costs from initial projections.

Additionally, the discussion touched on the financial strategy regarding capitalized interest. GWA's financial advisors recommended against this structure, which would have significantly increased total debt service. By opting out of capitalized interest, GWA aims to save ratepayers money, although it will result in slightly higher debt service amounts earlier in the repayment schedule.

The meeting also addressed ongoing projects, including efforts to expand the capture zone in The Springs, which is expected to increase water flow by 30% to 40%. This expansion aims to reduce reliance on water purchased from the Navy, thereby enhancing local water supply sustainability.

In conclusion, the Guam PUC meeting underscored critical financial strategies and project developments for GWA, with a focus on responsible debt management and improving water resource management for the community. The PUC will continue to monitor these initiatives as they progress.