The Ad Hoc Group of General Obligation Bondholders is supporting the Puerto Rico Sales Tax Financing Corp. (COFINA) restructuring deal, according to a knowledgeable industry source.
According to a statement from the Puerto Rico Oversight Board, the deal’s Plan Support Agreement requires the group “not to oppose confirmation of the COFINA Plan of Adjustment,” which is to be developed based on the Plan Support Agreement and Summary of Terms and Conditions.
The deal would give Puerto Rico a 32% reduction in COFINA debt and more than $17 billion in debt service savings, part of an effort to turn around the island's economy and restructure more than $51 billion of debt. The Plan Support Agreement and Summary of Terms and Conditions can be found on the board’s website.
The deal still faces potential problems with legal opposition from the Unsecured Creditors Committee and Puerto Rico Retirees Committee.
The board announced in the statement Friday that it had “finalized the amended and restated Plan Support Agreement with Puerto Rico’s government, COFINA, Monolines, Senior and Junior bondholders, and [local bondholders group] Bonistas del Patio.”
The board said it had also secured, as part of the agreement, support from Aurelius Capital Master, Ltd. and Six PRC Investments LLC, an affiliate of Monarch Alternative Capital, “significant holders of COFINA Senior and Junior bonds.”
The board confirmed that certain members of the Ad Hoc Group of General Obligation Bondholders support the agreement. Another source said the group as a whole supports it.
The Plan Support Agreement can be found on the board’s website. On Friday the board said it expected that the court will approve the COFINA plan of adjustment and compromise next month.
