Comments on: Puerto Rico’s airport giveaway Bridges, budgets, bonds Mon, 24 Nov 2014 00:29:08 +0000 hourly 1 By: elguaynabito Wed, 10 Oct 2012 10:58:16 +0000 Juan, who told you what to write? It is obvious that someone in high goverment told you to write this answer when you could not provide one on the spot. Actually I am sure this was written by someone else, because no one has a clue about this deal. It has been fodder that this is a bad deal for us and a GREAT deal for Aerostar. Only Republicans are capable of basically giveaway a goverment asset just to pay a debt. Do you really expect us to believe that this deal was done so that the bathrooms were cleaned 16 times a day, and to make sure that proper maintenance of the facilities was done. PR is losing a huge chunk of money because the goverment is unwilling to look after the maintenance of public buildings. I only wish, and I know is going to happen, that the FAA disapproves the deal. Viva Puerto Rico Libre de Fortuño y sus sequaces.

By: Angioletto Tue, 09 Oct 2012 19:44:17 +0000 I do not necessarily agree with the negative side of Cate Long’s stance on the privatization of LMM Airport. This has not been the first time that she has taken things out of context and opines as if she knows 100% that her conclusions on a given matter will come to pass just like she stated. As far as the privatization of such large scale airport like LMM goes I am siding with the financial circles that are lauding this deal.

By: Onyx13 Tue, 09 Oct 2012 17:55:13 +0000 Puerto Rico SE VENDE!!!
Y Fortuño va a seguir vendiendo a la isla de Puerto Rico? Si no puede gobernar un pais y tiene que privatizarlo, que se quite!!!

By: FJPR Tue, 09 Oct 2012 17:07:43 +0000 The LMM deal is not clear, even for those of us experienced in financial analysis. The fact that the npp is in a rush to get FAA’s approval before year end should raise a suspicious flag. Our past experience with corrupt npp and ppd politicians bribed for giving away public assets in transactions that make sense only for the investor who bribed them is long and shameful.

So Mr. Battle, fulfill your fiduciary responsibility and make all the facts of the transaction public, not only those who benefit the npp position. It’s the right thing and honorable thing to do.

By: Anonymous Tue, 09 Oct 2012 14:43:59 +0000 So we are supposed to take jcbatlle’s words as a given?! JCBatlle where is the evidence to prove all of your numbers and claims? And NO, a transcript that contains your own words cannot be used to prove your own words. And just because it says “Bloomberg” on it does not change the fact that it only contains your words and numbers which you have not shown a shred of evidence to prove. It does not change the fact that these are only your claims which have not been proven at all. JCBatlle works for the Republican PNP government of Puerto Rico which wants to sell the entire country to foreigners and then when we are left with nothing else to sell they will just blame their rivals the PPD party as they do for absolutely everything! He is just trying to give cheap excuses and unproven claims & numbers to hide his failure and those of the government he works for!

By: MPabonPR Mon, 08 Oct 2012 19:08:52 +0000 The Puerto Rico airport privatization process is a bad deal for both the US and Puerto Rico. Initially, it was sold to us as a way to retire the entire PR Ports Authority debt, and have some money left to resolve some problems. Now it turns out that it will only serve to retire 45% of the PRPA debt, according to Mr. Batlle. On Feb. 25. 2009, S&P isued its most recent rating of the PRPA debt; at the time, it downgraded the debt to BBB- with a stable rating, and indicated as weaknesses (i) the Authority’s fiscal performance and its link to the GDB’s, (ii) significant volatility in airport enplanements, and (iii) relatively high dependence on American Airlines. On the other hand, S&P indicated as strenghts (i) strong support from the GDB, (ii) monopolistic control of all the airports and (iii) operational and financial diversity from the PRPA’s two principal facilities (LMM airport and Port of San Juan). While all the listed weaknesses remain, with the LMM privatization the strenghts would dissapear; particularly when the upfront payment will be dependent upon a bond issue GUARANTEED by GDB’s letters of credit. This transaction will not only place the viability of the PRPA at serious risk, it places the already overextended GDB at risk, with a possible further downgrade of its debt. In the meantime, as concluded by a reputable economist in Puerto Rico, the PRPA fails to earn at least $1.088 billion during the life of the contract, and the non-competition clause of the contract threatens the viability of the regional airports, for which the US taxpayers have made serious economic investments For a more in-depth analysis of these matters, Ms. Long, you can send me your email address at THANKS.

By: HKohl Sun, 07 Oct 2012 16:56:34 +0000 Mr Batlle’s comments do not contradict Ms Long’s analysis. The only thing that is clear from his arguments is that the airport lease amounts to $615 million and that the main benefit is that of reducing debt load.

$550 million dollars of annual revenue sharing seems very high. The amount is equivalent to 25% of all personal taxes raised last year. Please cite where in the contract can one find that number?

$1.4 billion in capital improvements. If this comes from passenger fees, they are independent of the contract.

All other island airports lose money. If a fund for subsidizing them comes from passenger fees, it is independent of the contract.

Any transparent government would just publish the contract. As the saying goes, sunlight, sir, is the best disinfectant.

By: jcbatlle Sat, 06 Oct 2012 19:06:04 +0000 My name is Juan Carlos Batlle, President of the Government Development Bank for Puerto Rico. I am writing to clarify certain information on Cate Long’s October 5 MuniLand blog post, “Puerto Rico’s Airport Giveaway,” regarding remarks I made at the Bloomberg State Municipal & Finance Conference. With all due respect, her reference to my comments are, in fact, highly inaccurate, misleading and defamatory. As a transcript of my remarks at the Bloomberg State Municipal & Finance Conference on October 3, 2012 clearly reflects about the Public-Private Partnership for the Luis Munoz Marin International Airport:

– It provides important and tangible financial benefits to the government of Puerto Rico and its citizens; to the tune of $615 million upfront cash payment, annual revenue sharing of over $550 and investment in capital improvements of $1.4 billion over the life of the lease
– Enables Puerto Rico to retire approximately 45% of the Ports Authority’s debt;
– Sets up funds to support regional airports and other purposes; and
– Helps reestablish the financial stability of the Puerto Rico Ports Authority.

As I said at the Conference, given Puerto Rico’s high debt load, among the main objectives of our Public-Private Partnership Program are to reduce overall debt levels and reactivate infrastructure investment.

This transaction allows us to accomplish both objectives at the Ports Authority: “tackle the issue as we have to start lowering our debt load,” and “invest $1.4 billion over the life of the lease.” (these quotes taken directly from such transcript).

By: Ahora Sat, 06 Oct 2012 16:08:31 +0000 Readers should be able to have more details in order to coincide with this conclusion. This analysis seems very weak. The valuation of an asset such an airport is a complex matter and this does not even seem to come close to what is a simple asset valuation.