FAQ

AFICA is a public corporation and instrumentality of the Government of Puerto Rico, created by Law No. 121 on June 27, 1977, as amended (Act 121). Corporate entities that are eligible to receive financing through AFICA may finance their eligible projects, as allowed under Act 121 and AFICA’s Lending Rules, as amended. AFICA is a tax-exempt corporate entity pursuant to the provisions of the internal revenue codes of Puerto Rico and of the United States.

Act 121 authorizes AFICA to issue AFICA Revenue Bonds to: (i) finance, in whole or in part, the development and construction costs of new industrial, commercial, tourist, agricultural, educational, medical and environmental control facilities (“Eligible AFICA Projects” or First, Second or Third Priority Order Projects”, under AFICA Lending Norms) and (ii) refinance permanent debts of Eligible AFICA Projects, subject to compliance with AFICA Lending Rules.

AFICA aims to pave the way for and to facilitate project financing in order to promote the economic development of Puerto Rico.

1. AFICA issues AFICA Revenue Bonds, which may be sold in the tax-exempt municipal bond markets of Puerto Rico and/or the United States of America.
2. The cash proceeds of the AFICA Revenue Bonds issue are then loaned by AFICA to the corporate entity owner and developer of the Eligible AFICA Project.
3. The AFICA Revenue Bonds are limited legal obligations of AFICA, given that the payment of principal and interest on the AFICA Revenue Bonds is the legal and contractual obligation of the corporate entity that benefits from the money loaned by AFICA. The AFICA bond issuances are not repaid or guaranteed by any agency, public corporation or instrumentality of the Government of Puerto Rico.

The interest revenue that the AFICA bondholders receive is exempt from taxes in Puerto Rico and in the United States of America, provided that the project financed through AFICA complies with the applicable Puerto Rico and U.S internal revenue codes provisions.

Industrial, commercial (including shopping centers and similar projects), educational, environmental, agricultural, tourist, and medical facilities projects.

Investment grade rating is not required.  However, AFICA encourages the underwriter and the AFICA borrower under a public AFICA bond issuance to obtain an investment grade rating for the AFICA Financing.  

Also, no investment grade rating is required for private-placement AFICA bond issuances, which do not require registry with the United States of America Securities and Exchange Commission (“SEC”) or AFICA financings structured using a credit facility provided to AFICA by a financial institution or institutional investor.

AFICA can provide interim (construction) financing convertible into permanent financing, refinance existing AFICA financings and to refund existing AFICA financings by issuing “refunding bonds” or similar AFICA financings.

No less than 15% of the construction and development budget as cash capital contributed by the sponsors or owners of the eligible project.  The Board of Directors of AFICA can consider a capital contribution of less than 15% subject to the review by the Office of Financial Advisory of AAFAF.

Excluded from Capital Contribution are: (i) refinancing of an existing AFICA Financing and (ii) refund existing AFICA Financings by issuing “refunding bonds” or similar AFICA Financings.

Yes, please refer to the AFICA Brochure.