Retirement Fund Administrator Karl T. Reyes says their proposed $200 million bond flotation still needs the approval of the Legislature because only one government agency is allowed to float bonds for the CNMI—the Commonwealth Development Authority.
The Fund’s board of directors also has to approve the bond proposal, Reyes said.
“Officially, the board has to take action on the proposal and Merrill Lynch has to be advised. And then we would come up with legislation to that effect,” he added.
The proceeds of the bond could be reinvested in the market to ensure that the Fund will be able to meet its financial obligations to retirees and their dependents despite the CNMI’s economic slump, Reyes said.
Some board members also want more information about the proposal, he added. “Merrill Lynch (the Fund’s major financial consultant) will explain to the board members the technicalities of the bond flotation,” Reyes said.
He said the interest rate issue is another concern that the Fund will consider in case it proceeds with the planned bond flotation.
“We want the best deal in terms of bond rating,” he said.
