COFINA Senior Bondholders Pursue Voluntary Restructuring Agreement and Work to Address Puerto Rico's Economic Crisis

NEW YORK, Jan. 24, 2017 /PRNewswire/ -- The senior lien creditors of the Puerto Rico Sales Tax Financing Corporation (COFINA) issued the following statement today regarding their pledge to work with the Government of Puerto Rico and all stakeholders to help address the island's economic crisis:

Since its formation in the summer of 2015, the COFINA Seniors Coalition has been steadfast in its desire to assist Puerto Rico in stabilizing its economy and restoring financial growth. Toward that end, the COFINA Seniors Coalition—alone amongst major creditor groups—supported enactment of the Puerto Rico Oversight, Economic Management and Stability Act (PROMESA). We intend to build on our track record of constructiveness and transparency in the months ahead.

As the Rosselló Administration and Oversight Board begin taking necessary steps to address Puerto Rico's significant fiscal challenges, we first want to reiterate our commitment to working collaboratively and constructively with all stakeholders. We remain ready, willing and able to engage in good faith negotiations with the goal of reaching a voluntary agreement under Title VI of PROMESA. The principles underlying a consensual agreement must (i) provide the Government of Puerto Rico with real economic relief, (ii) deliver much-needed liquidity, and (iii) respect senior creditor and constitutionally-protected property rights. Although the current time limits under PROMESA are tight, we believe that much can be accomplished in the weeks ahead.

In that same spirit, we also wish to convey our strong support for Governor Rosselló's request for extensions of the Oversight Board's deadline for Puerto Rico's Fiscal and Economic Growth Plan (FEGP) of the stay on litigation by 75 days as provided by Congress under section 405 of PROMESA. Governor Rosselló's public remarks and initial executive orders have sent a positive signal to Puerto Rico's citizens and creditors about his willingness to make pragmatic decisions and pursue necessary reforms. It is in the best interest of all stakeholders to now provide the Governor and his staff the proper runway to sustain momentum through the preparation of a thoughtful financial roadmap. 

Looking ahead, we implore even the most reluctant and litigious stakeholders to work constructively with the Government of Puerto Rico and the Oversight Board during this crucial period rather than to attempt to circumvent the law and prioritize their own financial interests ahead of the island's citizenry. Attempts by a small subset of unsecured creditors to challenge the Puerto Rico statutes that created liens for COFINA bondholders are self-serving and built on deceptive half-truths, just like their prior efforts to attack members of Congress who supported the passage of PROMESA. Their latest stunts, which include deceptive on-island advertisements, are an extension of this disingenuous campaign. 

In closing, it is important to underscore that COFINA bonds represent the most widely-held issuance amongst on-island retail investors and retirees by a 7:1 ratio compared to GO bonds. Respecting the sanctity of securitizations is imperative to stem outmigration, head off further contraction, and preserve Puerto Rico's future access to both the capital markets and lower cost municipal financing.

About the COFINA Seniors Coalition

The COFINA Seniors Coalition is a group of creditors in Puerto Rico and throughout the United States, led by asset managers GoldenTree Asset Management LP, Merced Capital LP, Tilden Park Capital Management LP, Whitebox Advisors LLC, and others. 

Contact

Sarah Braunstein (on behalf of COFINA's senior creditors)
Edelman   
O: 212-277-3725
M: 646-549-6232
[email protected]

SOURCE COFINA Senior Bondholders