COFINA debt restructuring deal advances

A Puerto Rico Sales Tax Financing Corp. (COFINA) restructuring deal has taken another step forward.

On Thursday the Puerto Rico Oversight Board announced that it had entered into a plan support agreement and term sheet with the administration of Puerto Rico Gov. Ricardo Rosselló, COFINA, bond insurers, groups representing holders of COFINA seniors and COFINA juniors, and local bondholder group Bonistas del Patio.

The terms in the new documents are consistent with the terms announced on Aug. 8.

“The deal provides for more than a 32% reduction in COFINA debt, gives Puerto Rico approximately $17.5 billion in debt service savings and enables local retail bondholders in Puerto Rico to receive a significant recovery,” said board Executive Director Natalie Jaresko.

“This deal with all COFINA bondholders paves the way for presenting a plan of adjustment to the court and achieving a consensual restructuring of COFINA debt by the end of 2018,” Jaresko said.

The COFINA Senior Bondholders Coalition released a statement in support of the plan support agreement.

“We also believe it is notable that, in addition to the commonwealth and Oversight Board, the PSA signatories include a large cross-section of major COFINA creditors, monoline insurers, and local bondholders through Bonistas del Patio.”