Kimberlyn King-Hinds
U.S. Congresswoman Kimberlyn King-Hinds has drafted a bill seeking a federal guarantee on public debt issued by the CNMI, Guam, American Samoa, and the U.S. Virgin Islands.
The still unnumbered bill would require the U.S. Secretary of the Treasury to guarantee — and enter into commitments to guarantee — the timely payment of principal and interest on bonds issued by the governments of the U.S. insular areas.
King-Hinds shared a copy of the draft bill with Gov. Arnold I. Palacios, seeking his feedback on how the proposal may affect the CNMI’s financial position. She is also requesting his assistance in obtaining data to support her efforts to move the bill forward.
She cited a recent U.S. Government Accountability Office report, which stated that the CNMI’s total public debt as of Sept. 30, 2021 amounted to $121.1 million — posing fiscal risks.
King-Hinds said the GAO report also noted that the CNMI “faces multiple structural challenges that continue to constrain economic recovery and fiscal stability.”
She told the governor that the CNMI’s delayed economic recovery carries serious long-term consequences. The debt incurred by the CNMI government “at unsustainable rates,” King-Hinds said, places increasing burdens on future administrations and limits the CNMI’s capacity for public investment.
The congresswoman stressed the need for access to more affordable financing tools. Without them, she said, the CNMI risks falling further behind in its efforts to restore economic stability and plan for future growth.
She explained that the ability to refinance existing debt on better terms could provide the CNMI government with meaningful relief. She cited the governor’s fiscal year 2026 budget submission, which projects the government’s annual debt service to reach $18.4 million. Even modest reductions in interest rates, she said, could free up resources urgently needed to support core government functions, such as health, education and public safety.
Her bill, she said, would allow the U.S. Treasury, in consultation with the Department of the Interior, to guarantee principal and interest payments on bonds issued by the governments of the CNMI and other U.S. territories, subject to certain conditions. Bonds, she said, could be used for infrastructure investment, the support of essential public services, or the refinancing of existing debts.
She said under the bill, each territory would be eligible for up to $1 billion in outstanding guaranteed debt, with requirements for repayment agreements, audits, and a fee to offset the cost to the federal government.
King-Hinds asked for the governor’s assistance in providing the following data:
– An overview of the CNMI’s current outstanding public debt and associated interest rates.
– Any projections the administration may have regarding potential savings from refinancing under a federal guarantee.
– A list of infrastructure or service-related projects that have been delayed due to limited financing capacity.
She said his input in this effort “will be critical to ensure that this proposal is both responsive to the needs of the Commonwealth and persuasive to our colleagues in Congress.”
