COFINA Senior Bondholders Negotiated Constructively with Commonwealth Advisors and Welcome Continued Discussions
WASHINGTON, June 21, 2016 /PRNewswire/ -- The senior creditors of the Puerto Rico Sales Tax Financing Corporation ("COFINA") made the following statement today after the Commonwealth of Puerto Rico ("the Commonwealth") issued its press release describing the proposals it made to certain holders of debt issued by COFINA and the Commonwealth. The communication also described counterproposals made by groups of COFINA senior bondholders and General Obligation ("GO") bondholders. The COFINA Senior Bondholders Ad Hoc Group's latest proposal is designed to help address Puerto Rico's fiscal crisis and stabilize the Commonwealth's economy while protecting both individual investors and institutions.
"As creditors with strong legal property rights and alignment of interests with the Puerto Rican people, our group welcomed the opportunity to constructively discuss the Commonwealth's latest restructuring proposal. That is why we accepted the Commonwealth's first ever invitation to enter into a non-disclosure agreement and engage in direct discussions with principal bondholders. After assessing the latest proposal shared by the Commonwealth and its advisors, we developed a good-faith counterproposal that balances creditors' rights with Puerto Rico's liquidity needs and economic growth objectives. Unfortunately, after their negotiations lapsed with other creditors, the Commonwealth's advisors failed to make a counterproposal to us at this time.
"Given our track record of constructive engagement with other stakeholders, we prefer to continue negotiations. Our latest counterproposal reflects our willingness to accept real principal haircuts and it adopts several concessions set forth in the Commonwealth's June 14 proposal, including acknowledgement of and respect for our first lien on all COFINA revenues and assets, and implementation through PROMESA with validation under Title III or VI. Our group also accepted a smoothing of our portion of the pledged sales and use tax base amount ("PSTBA") in order to provide interim liquidity relief to the Commonwealth as it struggles to address its economic crisis, subject to agreement on a sufficient collateral cushion and mechanism.
"It is our understanding that the Commonwealth was working towards responding to our counterproposal, but it ultimately ran out of time with other creditor groups. We welcome the opportunity to continue engaging in constructive negotiations in the days and weeks to come. Our group believes that passage of PROMESA in the Senate will further support productive discussions between all stakeholders."
About the COFINA Senior Bondholders Ad Hoc Group
The Group is a coalition of creditors made up of retirees and individual investors in Puerto Rico and throughout the United States, as well as asset managers GoldenTree Asset Management LP, Merced Capital LP, Tilden Park Capital Management, Whitebox Advisors LLC, and others.
The COFINA Senior Bondholders Ad Hoc Group has come out in support of many of the components of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA") released by the House Natural Resources Committee. The framework ensures that creditors are treated fairly and equitably based on their legal standing and provides a strong foundation for federal legislation to address the Commonwealth's economic crisis.
Media Contacts
Chris Mittendorf
Edelman NY (on behalf of the COFINA Senior Ad Hoc Group)
212-704-8134
[email protected]
Greg Marose
Edelman D.C. (on behalf of the COFINA Senior Ad Hoc Group)
201-936-4126
[email protected]
SOURCE COFINA Senior Bondholders Ad Hoc Group
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