The Series B bond that will finance the American Samoa Government bank, was sold at 2:40 last Friday morning to a Texas based company Preston Hollow Investment.
According to documents that were provided to the Senate by members of the American Samoa Economic Development Authority, the interest rate for the bond is 13.18%, taking into account the company’s request for a 10% reserve fund, about $2 million which would be released to help make the final payment on the bond in 2024 and a 90% discount which means ASG pays it’s a fee of $2 million to buy the bond.
ASEDA was able to meet the offeror’s requirement that the bond have a Ba3 rating from Moodys.
This is the same rating that Moodys gave the Series A & C bonds which were sold last year, raising $55 million for which ASG has paid $1.5 million from October to January.
Vice chairman of ASEDA, Utu Abe Malae says the bond sale was concluded at 2:40 last Friday morning.
There are still steps to be taken before the Territorial Bank of American Samoa is set up.
For example, a board of directors for the bank is required under legislation approved by the Fono last year.
The governor’s executive assistant Iulogologo Joseph Pereira says Governor Lolo is now reviewing names submitted for his decision.
The law calls for 4 government representatives and 3 members at large.
Iulogologo says the names of director nominees will be sent to the Fono for confirmation once the governor has finalized the names.
The new bank is to be set up at the Bank of Hawaii in Utulei.
Iuloglogo explains that the Board of Directors of the Retirement fund needs to approve the assumption of the existing Bank of Hawaii lease by the Territorial Bank of American Samoa.
Upon completion of this task Bank of Hawaii will move to its Tafuna location from which it will continue its operation.
The CEO for the government bank must be appointed by the governor and confirmed by the board of directors, said Iulogologo.
In addition staff need to be hired and trained, particularly the management staff.
ASEDA Vice Chairman Utu says jobs with the bank will be advertised: these include the CEO, Assistant CEO and staff.
He said the timeline for getting the bank up and running is within 120 days.
KHJ News asked Iulogologo how soon after he government bank is up and running will BOH depart for sure from the territory.
He said when TBAS is operational and it has been determined that all the kinks have been mitigated notice will be provided to BOH to file its Departure Notice with the FDIC 90 days before its actual departure.
BOH first gave notice of its permanent withdrawal from American Samoa in late 2012 and the move was originally set for the first quarter of 2013.
However due to a request from Governor Lolo, the bank leadership in Honolulu delayed its departure until such time that an alternative bank is set up in the territory.
