Voting on GDB deal to start within a week

The voting on a proposed restructuring of Government Development Bank bonds will start within the next week.

The vote on the deal will take place according to the procedures of Title VI of the Puerto Rico Oversight, Management, and Economic Stability Act.

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Bondholder votes will be divided into those who hold guaranteed GDB bonds and those who hold Puerto Rico guaranteed GDB bonds. For the deal to pass, holders of at least a majority of the par value outstanding must vote in favor and holders of at least two-thirds of the par value voted on must vote in favor.

According to the Puerto Rico Fiscal Agency and Financial Advisory Authority, holders of 100% of the guaranteed debt and holders of a majority of the par value of the rest of the debt have already indicated support for the agreement.

The GDB and FAFAA provide additional information about the solicitation in an English- language press release found here.

The GDB has $4.2 billion in bond debt outstanding.

While the deal has multiple facets a key term is that bondholders would get new bonds with par values equal to 55% of the initial bond.

Epiq Corporate Restructuring is acting as the calculation and information agent for the solicitation. It is mailing out ballots early this week. Banks and brokers that sold the GDB bonds will get them later this week. They will distribute them to the beneficial holders by email and physical mail, according to Epiq Vice President Stephenie Kjontvevt.
Beneficial holders will receive the ballots by the end of this week or early next week.

If holders believe that their banks or brokers don’t have their up-to-date address and email address, the holders should contact the banks and brokers to give them their correct addresses. Otherwise, holders risk not receiving a ballot.

Once received, people should return the ballots to the party the ballot specifies. Brokers, banks and their agents will be compiling the votes and sending in master ballots to Epiq. The deadline for voting is 5 p.m. on Sept. 12.

Those with questions should contact Epiq at tabulation@epiqglobal.com and include “GDB” in the subject line.

Epiq oversaw the voting in the Lehman Brothers and General Motors bankruptcies.

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PROMESA Government Development Bank for Puerto Rico Puerto Rico
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