Puerto Rico board seeks extension of stay and mediation

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The Puerto Rico Oversight Board and the Puerto Rico Fiscal Agency and Financial Advisory Authority sought an extension of the stay and mediation for several bond types in the island's debt restructuring.

The board and FAFAA filed their motion late on Thursday. FAFAA is the financial arm of the government of Gov. Wanda Vázquez.

Puerto Rico bankruptcy Judge Laura Taylor Swain put a stay on several issues being litigated concerning the general obligation, Public Building Authority, Highways and Transportation Authority, Employees Retirement System, and Puerto Rico Infrastructure Financing Authority bonds on July 24. In the stay order she also said the parties should discuss the issues with a mediation team in private talks.

These orders took place in as part of the Title III bankruptcy process found in the federally approved Puerto Rico Oversight, Management, and Economic Stability Act.

On July 24 Swain ordered that the mediation team file its report on Oct. 28, that there would be a hearing on the report on Nov. 14, and that the stay would expire on Nov. 30.

On Thursday the board and FAFAA requested the report deadline to be moved to Nov. 27, the hearing to Dec. 11, and the stay expiration to the earlier of Dec. 31 or a date of the court’s choosing. They said that the topics are complicated and that more time is needed to address them.

In a related development, on Thursday Swain ordered the end of the litigation stay for ERS bond issues. Since late September both ERS creditor and debtor parties have been working for this.

On Thursday Swain also approved the creditor and debtor jointly proposed schedule for the ERS bond litigation with the final filing date being May 20.

If the stay and mediation continued for the other bonds it would affect about $25.7 billion in the Title III bankruptcy. There is about $3.2 billion outstanding in ERS bonds.

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PROMESA Commonwealth of Puerto Rico Puerto Rico Infrastructure Financial Authority Puerto Rico Public Buildings Authority Puerto Rico Employees Retirement System Puerto Rico Highway & Transportation Authority Puerto Rico