Squire Patton Boggs Assists US Virgin Islands on Historic $955 Million Bond Issuance to Refinance Rum Tax Cover-Over Bonds and Provide Funding to Government Employees Retirement System

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    A multidisciplinary team of Squire Patton Boggs lawyers and policy professionals represented the U.S. Virgin Islands in the successful closing of its historic $955.5 million Matching Fund Special Purpose Securitization Corporation bond offering. Proceeds from the historic offering, which includes $933.7 million tax-exempt Series 2022A bonds and taxable $21.7 million Series 2022B bonds will, in part, be used to stabilize the USVI Government Employees Retirement System.

    The SPB team, led by partners Karol Denniston and Pedro H. Hernandez, involved specialists drawn from the firm’s Restructuring & Insolvency, Public and Infrastructure Finance, Public Policy, and Corporate practices, who advised the Government of on the complex legislation for the creation of the special purpose vehicle and the issuance of the bonds.

    “We are proud to have supported Governor Albert Bryan Jr. and his administration in bringing this historic legislation to fruition,” said Karol Denniston. “Our entire team is delighted that this transaction is now closed and funded. We believe the USVI has a sound legal framework and a stronger financial platform to overcome the funding challenges facing the pension system and the Government Employees Retirement System will be secured for future generations.”

    Under the new legislation, the Government of the USVI has committed over the next 30 years to providing the Government Employees Retirement System with $158 million per year of the matching fund revenues, funded from rum excise taxes paid by the United States.

    Squire Patton Boggs has worked since 2020 on this complex transaction, with the firm assisting Governor Bryan and his administration through multiple legislative and policy challenges, including securing the cooperation of U.S. Treasury and the Department of the Interior. The team included partners Karol Denniston, Guy Guinn (retired), Pedro Hernandez, Pedro Miranda, Peter Morrison, Ed Newberry, Dynda Thomas, David Stewart, principal David Schnittger and senior associate Brandon Arents.

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