The Government Development Bank for Puerto Rico (GDB) — (BGF)— was the government bond issuer, intragovernmental bank, fiscal agent, and financial advisor of the government of Puerto Rico. The bank, along with its subsidiaries and affiliates, serves as the principal entity through which Puerto Rico channels its issuance of bonds. As an overview, the different executive agencies of the government of Puerto Rico and its government-owned corporations either issue bonds with the bank as a proxy, or owe debt to the bank itself (as the bank is a government-owned corporation as well).
Entity Common name Type Responsibility Authority for the Financing of the Infrastructure of Puerto Rico AFI affiliate infrastructure Children's Trust Frund CTF affiliate childhood improvements Industrial, Tourist, Educational, Medical, and Environmental Control Facilities Authority AFICA affiliate multiple sectors Housing Finance Authority PRHFA subsidiary housing subsidies and incentives José M. Berrocal Institute for Economics and Finance Berrocal Institute subsidiary internships Municipal Financing Agency MFA affiliate municipalities Municipal Financing Corporation COFIM affiliate municipal tax Public Financing Corporation PFC subsidiary general obligation bonds (executive agencies/central government) Public-Private Partnerships Authority PPPA affiliate public-private partnerships Sales Tax Financing Corporation COFINA affiliate sales tax (IVU/SUT) Tourism Development Fund TDF affiliate tourism and hotel industry
History The Bank was founded under the initiative of Governor Rexford Guy Tugwell, who signed Law 253 of May 13, 1942, creating the institution in charge of economic development for the Government of Puerto Rico. A subsequent law in 1945 expanded its responsibilities to include serving as the fiscal agent for, and financial advisor of, the government of Puerto Rico. The centralized government structure established by Tugwell required a fiscal agent, differing from the decentralized model followed by most U.S. states, where individual agencies and political subdivisions manage their own bond issuance.
During its formative years, the GDB contributed to the financial structuring of the Puerto Rico Water Resources Authority, a publicly owned electric company that initially generated power through hydroelectric systems. During its first decade, GDB financed infrastructure development, particularly the development of low-cost housing.
Between 1951 and 1965, the GDB issued over $1 billion in bonds to finance the islands' infrastructure, contributing to Puerto Rico's economic growth. The GDB provided financial support for Puerto Rico's first condominium and several early shopping centers built in 1956, during a period when private banks were hesitant to invest in these projects.
During former Gov. Pedro Rosselló's administration, and under Marcos Rodríguez Ema's presidency, the GDB established and financed the Puerto Rico Museum of Art. The museum is considered one of the most prominent cultural institutions in Puerto Rico, alongside the Ponce Museum of Art founded by Luis A. Ferré.
The GDB is in the process of winding down its operations in an orderly fashion under Title VI of the Puerto Rico Oversight, Management, and Economic Stability Act, Publ. Law 114-187 of June 30, 2016 (PROMESA).
Presidents
See also List of bonds issued by Puerto Rico List of national development banks
References
External links
http://gdb.pr.gov/