USVI Secures $150 Million Through GARVEE Bond Sale to Fund Major Transportation Projects

The V.I. Transportation and Infrastructure Corporation (VITIC), a subsidiary of the Virgin Islands Public Finance Authority, has successfully priced the sale of $150 million in Grant Anticipation Revenue (GARVEE) Bonds, securing funding for critical transportation projects and achieving significant debt refinancing savings, Government House made known Tuesday evening.

The bond pricing, completed on Tuesday, provides $96 million in funding for transportation improvements across the territory, including the completion of Phase II of the Veterans Drive Improvement Project, support for the St. Thomas to St. Croix ferry, and road enhancements on St. Croix. Additionally, the sale enabled the government to refund $54 million in outstanding 2015 GARVEE Bonds, yielding considerable interest savings.

According to the administration, despite recent volatility in the bond markets, the sale attracted strong investor demand from prominent financial institutions such as Vanguard, Fidelity, Goldman Sachs, Nuveen, and others. The bonds were oversubscribed across all maturities, allowing underwriters to reduce yields by up to 10 basis points on the longest-dated maturities, resulting in nearly $1 million in savings for the territory.

The final sale was executed at a true interest cost of 4.54% over 20 years, with yields ranging from 3.42% in 2025 to 4.75% in 2044. The refinancing of the 2015 bonds also delivered present value savings of $1.5 million, or 2.86% of the refunded debt.

The triple tax-exempt GARVEE Bonds received an "A" rating with a stable outlook from Standard & Poor’s, and were sold at tight credit spreads over the AAA Municipal Market Data (MMD) index—57 basis points in 2025 and 60 basis points in 2044—marking the narrowest spreads for a government bond transaction in recent memory.