Puerto Rico fiscal board files Cofina debt adjustment plan
SAN JUAN – The Financial Oversight and Management Board for Puerto Rico announced Friday that it filed in court a debt-adjustment plan for the Sales Tax Financing Corp. (Cofina).
The filing, under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (Promesa) follows a settlement agreement with Cofina’s court-appointed agent, Bettina Whyte, based on an agreement in principle developed by both the Cofina and the commonwealth’s agents, and the preliminary agreement among Cofina bondholders announced Aug. 8, and the subsequent plan support agreement and term sheet between the Government of Puerto Rico, Cofina, monoline insurers, senior and junior bondholders and the Bonistas del Patio creditor group, the board explained.
“All of the foregoing agreements were achieved with the assistance of the judicially appointed mediation team led by the Hon. Barbara J. Houser,” a board release reads.
The oversight panel also announced it certified, by unanimous consent, a revised fiscal plan for Cofina. The document is available on the board’s website, at www.oversightboard.pr.gov.
Cofina’s is the first adjustment plan submitted in the debt restructuring process under Promesa, and “covers the totality of the $17.6 billion in COFINA debt, which in turn represents 24% of the total of Puerto Rico’s bonded debt to be restructured,” the board said.
“Today marks another major milestone in the process of restructuring a big piece of Puerto Rico’s unsustainable debt,” board Executive Director Natalie Jaresko said. “As earlier announced, the terms agreed to by the parties, now contained in this Plan of Adjustment, provide for more than a 32% reduction in COFINA debt, gives Puerto Rico approximately $17.5 billion in debt service savings, enables local retail bondholders in Puerto Rico to receive a significant recovery and paves the way for achieving a consensual restructuring of COFINA debt by the end of 2018.”