Assured Guaranty asks FOMB to reconsider certification of Fiscal Plan for Puerto Rico

The head of Assured Guaranty Corp. and Assured Guaranty Municipal Corp., is asking the Financial Oversight and Management Board (FOMB) to reconsider its certification of the commonwealth fiscal plan.

The firm insures about $1.6 billion of commonwealth general obligation bonds and about $1.9 billion of revenue bonds issued by other entities including the Highway and Transportation Authority, Cofina and the University of Puerto Rico.

On October 6 of last year, Assured withdrew a lawsuit othe legality of the the fiscal plan the Oversight Board approved on March 13 of 2017 that at the time the monoliner said violated the Puerto Rico Oversight, Management, and Economic Stability Act among other laws.

“Assured withdrew its lawsuit because it had been led to believe that the Oversight Board sought to “reset” its relations with Puerto Rico’s creditors and that the Original Fiscal Plan would be redrafted. Assured hoped that this “reset” would entail a more open fiscal plan development process aimed at producing a constitutional and Promesa-compliant fiscal plan benefitting from the input and support of creditors,” stated the letter written by Dominic J. Frederico, president and CEO of Assured.

“Unfortunately, the Oversight Board again formulated a fiscal plan without appropriate transparency of information and assumptions, and without collaboration with creditors,” he added in the letter dated Tuesday.

He said the fiscal plan approved on April 19 of this year violates Promesa.

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First, he said, the new fiscal plan does not respect lawful priorities and lawful liens in that it prioritizes general government expenditures instead of debt payments. It also violates Promesa dispositions that prevent the transfer of resources from one entity to another. The plan diverts revenues from the Highway and Transportation Authority, the Convention Center and the Infrastructure Financing Authority that were used to pay debt, to the commonwealth general fund.

The Fiscal plan also does not identify essential services and does not provide for a method to access capital markets.

“In addition to these legal defects, the Revised Fiscal Plan suffers from flawed methodologies and assumptions that result in an artificially pessimistic projection of Puerto Rico’s future revenues,” the firm said.

The Revised Fiscal Plan also suffers, he said, from the ongoing lack of up-to-date audited financial statements or other public information sufficient to develop or assess a realistic fiscal plan.

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Puerto Rico governor participates in Puerto Rico Trade & Export Co. event in NY

SAN JUAN – Puerto Rico Gov. Ricardo Rosselló participated Thursday morning in a New York event organized by the Puerto Rico Trade & Export Co. (CCE by its Spanish initials) to foster trade between Puerto Rican businesses and companies established in the Big Apple.

In what has become one of the government’s main message to the private sector, Rosselló reiterated that “Puerto Rico is open for business,” and highlighted his administration’s measures to facilitate entrepreneurism on the island.

Following his Washington visit, Gov. Ricardo Rosselló traveled to New York to promote Puerto Rico’s business opportunities. (Courtesy)

The business event was attended by members of the private sector, elected officials and former New York officials. In a written statement, CCE Executive Director Ricardo Llerandi said that about 115 business appointments were coordinated for the event.

Puerto Rico’s delegation comprised business people from the food and beverage, construction, and engineering sectors. The participating companies included Boricola, Olein Recovery, Rovira Foods, Invision Engineering, Grupo Dulce, Toledo & Co., Puerto Rico Supplies, Destilería Coquí, Apiarios Caraballo, Coquito Sabroso and Productos Gosén.

“When we talk about expanding to markets in the United States, New York is always a natural destination to which every local business should look to enter. Not only because of the large Hispanic community that lives there, but also because it represents a highly attractive market to businesses of any economic sector,” Llerandi said.

Rosselló Meets First Hispanic Woman in U.S. Senate

Before his visit to New York, the governor met Wednesday afternoon in Washington, D.C., with Sen. Catherine Cortez (D-Nevada), the first Hispanic woman elected to the U.S. Senate.

Accompanied by the executive director of the Puerto Rico Federal Affairs Administration in Washington (Prfaa), Carlos Mercader, who has been with the governor during the entire trip, Rosselló and the senator discussed the extent of the Puerto Rico Oversight, Management and Economic Stability Act (Promesa) and the Puerto Rican government’s measures to implement its fiscal plan.

Puerto Rico governor heads stateside to meet Education secretary

Just as he did with other members of Congress, Rosselló urged Cortez to help keep Puerto Rico in the Medicaid program’s funding.

Mercader and Rosselló also met with U.S. House Veteran Affairs Committee Chairman Phil Roe (R-Tennessee), with whom they discussed Puerto Ricans’ contribution to the U.S. Military and the need to obtain equal treatment for the island’s citizens.

The Puerto Rican officials’ last meeting in the federal capital was held with Sen. Martin Heinrich (D-New Mexico), with whom they discussed the fiscal plan, U.S. tax reform and the results of the June 11 political-status referendum.

“It is important to continue to strengthen ties with Democratic and Republican representatives and senators, to ensure that the American citizens residing in Puerto Rico receive equal treatment to those residing stateside,” the governor emphasized.

Puerto Rico governor to address fiscal board’s budget concerns

Rosselló has until 5 p.m. Thursday to respond to the Financial Oversight & Management Board regarding the changes it requested to the government’s budget. The governor was returning to the island Tursday afternoon.

On Friday, the fiscal board created by federal law to oversee the island’s finances, will hold its eighth public meeting, in which it must certify a budget for Puerto Rico.


Promesa coauthor meets with Rosselló in Fortaleza

SAN JUAN — Accompanied by State Secretary Luis Rivera Marín, Governor Ricardo Rosselló welcomed on Monday Rep. Sean Duffy (R-Wisconsin), coauthor of the bill that enabled the implementation of the Puerto Rico Oversight, Management & Economic Stability Act (Promesa).

Rep. Sean Duffy (R-Wisconsin) coauthored Promesa as a measure to address Puerto Rico's financial and humanitarian crises, which he attributed to "disastrous" management. (Susan Walsh, File/AP)

Rep. Sean Duffy (R-Wisconsin) coauthored Promesa as a measure to address Puerto Rico’s financial and humanitarian crises, which he attributed to “disastrous” management. (Susan Walsh, File/AP)

During the meeting in La Fortaleza, which lasted around 30 minutes, the island’s chief executive encouraged the Republican representative to intercede on behalf of Puerto Rico in the federal sphere, particularly for Medicare and Medicaid fund parity.

Rosselló also noted that his administration is currently developing the Fiscal Plan requested by the Fiscal Oversight & Management Board created under Promesa, with aims to protect essential services. The document, which must be presented by February 28, must include measures to address the island’s $70 billion debt.

See also: Rosselló Requests Meeting with US Treasury Secretary

Last May, Duffy presented the bill for Promesa along Natural Resources Committee President Rob Bishop, to “head the island toward fiscal responsibility and economic development.”

In defense of Promesa, the senator had said that years of “disastrous” policies sank Puerto Rico’s economy, leading to a humanitarian crisis for millions of U.S. citizens.