NEW YORK, Feb. 22, 2017 /PRNewswire/ -- The COFINA Seniors Coalition today filed a motion to intervene in Lex Claims, LLC et al. v. Garcia-Padilla et al. for the purposes of exposing the meritless, self-serving claims brought by a litigious faction of General Obligation ("GO") bondholders. Although our group preferred to respect PROMESA's litigation stay and use this valuable time window to pursue a voluntary restructuring agreement, we now welcome the opportunity to successfully defend our constitutionally-protected property rights and ultimately assert our strong legal standing over these unsecured creditors.
While the Plaintiffs clearly view their litigation campaign as a means of holding Puerto Rico's economy hostage, our group understands this baseless action threatens the island's ability to re-access the capital markets through securitized finance mechanisms and also puts countless local bondholders at risk. The fact that COFINA bonds are the most widely held on-island issuance by a seven-to-one margin compared to GO bonds means retail investors and retirees are in the crosshairs. Preventing these individuals from receiving their coupon payments and depressing COFINA bond values will translate to a further reduction in commerce and another uptick in outmigration.
We hope Puerto Rico's leaders and citizens do not overlook this GO bondholder group's startling level of comfort with inflicting economic collateral damage on the island. If the Plaintiffs achieve their desired outcome, the Government's historic financing challenges will be compounded by a loss of access to the securitization channel and very limited capacity to issue new GO debt without violating Puerto Rico's constitutional debt limits.
This strategy of obstruction first came to light during the Plaintiffs' failed attempt to lobby against PROMESA and has reappeared in the form of hostile litigation and deceptive on-island ads that attack COFINA. In contrast, we look forward to being heard in court and prevailing on the legal merits of our case.
About the COFINA Seniors Coalition
The coalition of creditors is 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 LP, Whitebox Advisors LLC, and others.
Greg Marose (on behalf of COFINA's senior creditors)
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SOURCE COFINA Senior Bondholders Group