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VI Slice Program Faces Scrutiny Over Six Loans Since Inception, EDA Chief Defends Performance



Since its inception in May 2023, the VI Slice program has seen only eight transactions approved, as disclosed by Economic Development Authority (EDA) CEO Wayne Biggs Jr. during a recent Senate hearing. The data has left legislators questioning the program’s efficacy.

The hearing, conducted by the Senate Committee on Housing, Transportation and Telecommunications, included representatives from the EDA and the VI Housing Finance Authority, aimed to shed light on the program’s progress.

With nearly $615,000 in gap financing distributed through eight transactions, six loans have been fully closed while the remaining two are expected to close by this month’s end. The majority of these transactions were facilitated through Capital Mortgage Texas, with the rest being managed by the U.S. Department of Agriculture Urban Renewal and First Bank.

This modest outcome did little to assuage the concerns of the lawmakers, with Senator Dwayne DeGraff expressing skepticism over the program’s effectiveness. However, Mr. Biggs defended the program, citing the eight families who received an average of $76,000 each, now securing a home through this initiative.

One of the major hurdles identified during the hearing was the challenge in getting a substantial number of applicants to the qualification stage. A testimony revealed that 70% of the 64 households that reached out to one bank regarding the program didn’t complete the requisite residential loan application, with only two advancing to the underwriting process.

Senator Marvin Blyden urged the involved agencies to ramp up their efforts, stressing the need for more creative and expansive outreach. In response, Freida Webster, VIHFA director of homeownership, mentioned their ongoing two-hour online sessions held weekly to educate potential homeowners on various essential topics.

On his part, Mr. Biggs disclosed the EDA’s plan to intensify marketing strategies. The outlined plans include town hall meetings, radio and newspaper ads, social media campaigns, webinars, and community outreach involving local schools to foster better participation.

In a bid to expand the pool of lenders beyond the existing five institutions, Mr. Biggs shared the EDA’s ongoing recruitment of additional lenders to the VI Slice program. About forty introductory letters are to be sent to licensed lenders within the territory, as per the list compiled from the Division of Banking and Insurance directory. Senator Milton Potter, however, questioned if this approach was robust enough, suggesting a more engaged dialogue with lending institutions to better harness the program’s potential.

Senator Diane Capeheart and others expressed concerns over bureaucratic hurdles, while Mr. Biggs contended that any red tape primarily resided with the banks’ mortgage acquisition process.

Concerns were also raised regarding Banco Popular’s delayed participation as a lending institution within the program. Mr. Biggs attributed the delay to ongoing reviews of a memorandum of understanding between Banco Popular and the EDA, expressing optimism for a resolution by the week’s end.

When probed about the program’s success metrics, Mr. Biggs acknowledged the lofty goal of having 95% of applications approved by primary lenders as a significant benchmark, albeit a challenging one. He stressed that not all applicants would meet the qualification criteria, drawing an analogy to a Senate race with limited spots available for numerous contenders.

Senator Novelle Francis emphasized the need for better collaboration among the agencies overseeing VI Slice, seeking insights from Dr. Stephanie Berry, VIHFA chief operating officer, on strategies to improve the program’s impact.

Dr. Berry reiterated the triad of challenges they face: Workforce, Contractors, and Education. She explained that the effectiveness of any plans to construct new homes in the territory hinges on the availability of contractors, which currently is a limiting factor due to their existing obligations and workforce constraints.

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VI Electron and Honeywell Forge New Path in Energy Storage for USVI Solar Initiatives



In a significant step forward for renewable energy in the U.S. Virgin Islands, Honeywell announced its collaboration with VI Electron on Tuesday. This partnership marks the beginning of an ambitious plan to implement the first of several advanced battery energy storage solutions (BESS) in up to six strategically placed solar parks across the territory.

The role of battery storage in these municipal solar projects cannot be overstated. It’s a game-changer, enabling the storage of excess energy produced during peak times. This not only guarantees a stable power supply but also enhances the overall efficiency of the power grid.

Honeywell’s inaugural BESS for VI Electron boasts an impressive 124 MW capacity. It features a comprehensive battery management system that promises advanced energy controls and an integrated safety system. This state-of-the-art system is a key to smarter energy management, allowing for precise forecasting and optimization of energy usage, thereby paving the way for a more cost-effective and efficient energy grid.

Governor Albert Bryan Jr. has expressed enthusiastic support for this initiative. He recognizes the alignment of Honeywell’s battery storage expertise with the territory’s vision for a greener future. Governor Bryan highlighted the significance of the VI Electron and Honeywell partnership as a catalyst in achieving the territory’s ambitious renewable energy target, aiming for at least 30 percent of energy consumption to be sourced from renewable methods.

Earlier in the year, the V.I. Water and Power Authority board greenlit power purchase agreements with VI Electron for solar energy provision and with Advance Power for the development of wind energy solutions. This move is a cornerstone in diversifying the territory’s energy sources.

The integration of renewable energy into the USVI’s energy portfolio is expected to bring about a substantial decrease in consumer energy costs. This is primarily attributed to a marked reduction in the Levelized Energy Adjustment Clause (LEAC). WAPA CEO Andrew Smith shared his optimistic outlook with board members in April, foreseeing a significant reduction in fuel costs for the territory.

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“Jump-Up!” Celebration Hindered by Christiansted’s Deteriorating Roads: Attendee Injured, Local Businesses Affected



The festive atmosphere of the “Jump-Up!” event in Christiansted was overshadowed by poor road conditions, impacting both vendors and attendees. Laurie Hirons, owner of Gecko Boutique, described to WTJX how vendors struggled with inadequate setup spaces, with some opting not to participate. “Setting up tents in what seemed like gutters was a challenge for many,” Hirons recounted.

Matt Ridgeway, chair of the Christiansted Retail & Restaurant Association, reported a distressing incident where an individual sustained arm injuries due to the hazardous roadways. Ridgeway expressed his concern, saying, “It’s troubling that our environment isn’t safer for everyone, locals and visitors alike.”

According to Ridgeway, the event saw a notable decrease in sales, attributing this to reduced pedestrian traffic. He observed a general reluctance among people to visit Christiansted under the current conditions.

Both Hirons and Ridgeway voiced their frustration over unfulfilled promises. Despite assurances from road contractor Marco St. Croix following a stakeholders’ meeting, the much-needed road repairs remain pending. Hirons expressed her disappointment to WTJX, stating, “Promises were made, yet we see no improvements.”

Ridgeway extended his concerns beyond the roads, highlighting broader issues affecting the Virgin Islands, such as environmental challenges and infrastructure needs. “Our focus shouldn’t be solely on tourist comfort but also on the wellbeing of St. Croix residents and all Virgin Islanders,” he remarked.

Emphasizing the urgency of addressing these issues, Ridgeway called for unity and accountability within the community. He stressed the importance of seizing current funding opportunities for recovery projects to build a better future for the territory. “We owe it to our children to make the most of this chance,” he asserted.

Ridgeway informed WTJX of an upcoming meeting with Waste Management Authority officials to discuss the long-standing issue of Christiansted’s road paving project, a source of frustration for residents and businesses for several years.

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S&P Global Foresees Potential Default for Ocean Point Terminals Amid Debt Concerns



S&P Global Ratings, a prominent credit rating agency, recently adjusted the debt rating of Limetree Bay Terminals LLC (now operating as Ocean Point Terminals in the USVI) to a lower level, signaling growing concerns over the company’s financial stability.

The downgrade, announced on November 17, shifted the company’s rating from CCC to CCC-, with a negative outlook. This change occurs as Ocean Point Terminals approaches the February 15, 2024, deadline to address its significant outstanding debt totaling approximately $476 million.

S&P Global Ratings expressed a stark assessment, stating that it anticipates Ocean Point Terminals will “likely default” or be compelled to negotiate a distressed exchange in the coming three months to manage its considerable debt. The agency did note, however, that this scenario could be avoided with a substantial increase in contracted business or an infusion of equity, though it deemed such developments unlikely.

Despite recent contract gains, S&P Global Ratings remains skeptical about the company’s ability to repay its loans through operational cash flows alone. The agency further noted that the current economic environment presents additional challenges to the company’s financial recovery.

The agency emphasized the high rates and unsustainable capital structure in the near term, pointing out the insufficiency of current and anticipated contracts to significantly alter the company’s financial course. As the February 15 maturity date for the debt nears, the likelihood of a distressed exchange — where a company negotiates with creditors to restructure its debt under more favorable terms — increases, influencing the negative outlook from S&P Global Ratings.

A distressed exchange could involve various restructuring strategies, including offering creditors equity in the company based on debt value or substituting existing debt with new, more favorable terms.

In the event of a distressed exchange or failure to meet interest or amortization payments, Ocean Point Terminals’ debt rating could face further downgrades. However, securing longer-term contracts that generate sufficient cash flow to cover debt service could lead to a revision of the company’s outlook to “stable,” as per S&P Global Ratings.

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