By The Star Staff
The Financial Oversight and Management Board has authorized the Puerto Rico Housing Finance Authority (HFA) and the municipality of Aguada to issue debt.
The oversight board allowed the HFA to enter into a credit agreement with Banco Popular de Puerto Rico for up to $43 million to finance an affordable rental housing project, Casa Linda Apartments, in Bayamón.
The debt transaction will partially cover the total costs of substantial rehabilitation to the existing 199 units, new construction of a 52-unit affordable rental housing project and to cover the financing and legal costs of the transaction, according to an Oct. 20 letter.
The debt transaction is a non-recourse obligation to HFA issued in order to access tax-exempt financing pursuant to the U.S. Department of Housing and Urban Development and HFA’s 2020 qualified affordable housing program, and will not be guaranteed by HFA, the Government of Puerto Rico or any of its agencies, public corporations or instrumentalities.
The proposal is the 10th affordable housing project using this type of financing structure submitted for review under Section 207 of the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, and approved by the oversight board.
Meanwhile, the oversight board also authorized the Municipality of Aguada to issue a $4.6 million municipal general obligation (GO) bond for 2023 for the rehabilitation of rural roads and to cover financing costs.
The 2023 GO bond is structured to fully amortize over a 15-year term. Annual payments of principal will be due and payable on Jan. 1 of each year, with a commencement date to be set in 2023 upon approval of the debt transaction.
The 2023 GO bond will accrue interest at a fixed rate equal to the prevailing rate at the U.S. Department of Agriculture at the time of approval, originally stated at 3.625%. As part of the debt transaction, the municipality will pay $17,054 in transaction fees and closing costs, according to the Oct. 20 notice.