The U.S. Virgin Islands pulled a $943.6 million bond refinancing, scheduled for Thursday, in response to a lawsuit filed Tuesday evening.
The Government Retirees United for Fairness, known as GRUFF, and Hugh Clarke filed the suit in Virgin Islands Superior Court. The defendants are Gov. Albert Bryan, Jr., Senate President Novelle Francis, the government of the Virgin Islands, and the legislature of the Virgin Islands.
The suit sought a temporary restraining order from the judge to stop the sale. As of 3 p.m. Thursday no such order had been placed on the docket for the case.
The planned matching fund bond from the Matching Fund Securitization Corp. was getting a very good response from the market, said Richard Tortura, president of Capital Markets Advisors.
In response to the lawsuit, Tortura and the islands’ government believed it was prudent to postpone the pricing. He said he hoped to know of a new date for pricing the bonds within a day or two, but he said he wasn’t sure about this and was just “speculating.”
The Virgin Islands government was hoping to complete the sale by the end of this month. October 1 is the start of the government’s new fiscal year and there are financial benefits to the government to complete the sale before then.
The pensioners claim that the government’s approval of the bonds had “irregularities and violations” in following of the Virgin Islands constitution. Gov. Bryan signed the law on Saturday.
The Matching Fund Securitization Corporation is a special purpose, independent and autonomous public corporation and government instrumentality of the U.S. Virgin Islands.
Kroll Bond Rating Agency has given the bond a BBB rating with a stable outlook. No other ratings agencies are rating the deal.
Moody’s Investors Service rates the existing senior lien matching fund bonds Caa2 and the subordinate lien matching fund bonds Caa3.
