Government

Government's Plan To Borrow $110 Million Comes At Higher Interest Rate Because Of Bonds Downgrade

ST. THOMAS -- The Government of the Virgin Islands, relative to borrowing, is in an unfamiliar position. Unfamiliar because for years the government has borrowed money to fill budget deficits, and the market has generally dealt fairly with the G.V.I., lending to the government with an interest rate that hovered around 4 to 5 percent. A drastic new reality shook the territory when venerable U.S. ratings firm Moody's downgraded the government's four liens of matching fund revenue bonds -- issued through the Virgin Islands Public Finance Authority and secured by matching fund revenues --  which are remittances paid by the federal government to the G.V.I. of a portion of federal excise taxes collected on rum produced in the territory and shipped to the U.S. mainland. Now, the government's borrowing interest rate will most likely be between 6 to 7 percent, said Finance Commissioner Valdamier Collens, speaking during a budget wrap-up hearing in the Committee on Finance at the ...