The Puerto Rico Sales Tax Financing Corp. (COFINA) swapped new bonds for old on Tuesday in the biggest municipal debt restructuring in U.S. history. ... Puerto Rico Insured Bond. There have been two significant developments in the ongoing restructuring case for the Commonwealth of Puerto Rico. COFINA was originally created for the purpose of financing the payment, retirement or defeasance of certain debt obligations of the Government of Puerto Rico. Puerto Rico's federal supervisors are making a final push to write down $18 billion in sales-tax bonds under a settlement that would mark their largest renegotiation yet of the U.S. territory's crushing debts. It has been a busy quarter for the Commonwealth of Puerto Rico. The Puerto Rico Sales Tax Financing Corporation (“COFINA”, for its Spanish acronym) is a public corporation of the Government of Puerto Rico created pursuant to Act No. Puerto Rico (Commonwealth of): COFINA Bonds Still Face Loss in Eventual Restructuring, Despite Making Payments Moody's Investors Service 04 Aug 2016 As we reported last year, on August 10, 2017, Judge Swain entered an order establishing procedures to govern resolution of the Commonwealth-COFINA… Puerto Rico COFINA Bonds and Forgotten Detroit. Puerto Rico first defaulted on its general obligation bonds in July 2016, when it failed to pay roughly $1 billion owed to its creditors and hasn't made any payments since. After two hurricanes ripped through Puerto Rico in 2017, bond investors feared they would be asked to absorb large losses. RICO SALES TAX FINANCING CORPORATION (“COFINA”) (“COFINA’s Petition”). Puerto Rico’s bankruptcy is the latest to trigger a reassessment of which bonds are the most iron-clad in the $3.8 trillion state and local government debt market, a … COFINA after the bonds were originally issued on the Effective Date if there was no financial benefit to COFINA or the Commonwealth of Puerto Rico. Money manager Glenn Ryhanych sat in his office in Virginia, waiting for a final resolution of bankrupt Puerto Rico’s nearly two-year saga with its $17.6 billion of sales-tax-backed bonds. COFINA is a corporation that is owned and controlled by the Puerto Rican government. This is the second installment of a two-part series on the COFINA debt restructuring agreement for Puerto Rico. On May 15, 2019, COFINA and the IRS entered into a closing agreement with respect to the Restructured Sales Tax Bonds (the “IRS Closing Agreement”). This would deal a huge blow to the already dwindling attractiveness of Puerto Rico’s various outstanding bonds, except those COFINA bonds that would be on an accelerated payment schedule. Cofina, Puerto Rico’s Fiscal Agency and Financial Advisory Authority and the fiscal oversight board had agreed that if the IRS determined that the interest on the bonds was excludable from gross income for federal income tax purposes, Cofina would offer all bondholders the opportunity to exchange such bonds for Cofina tax-exempt bonds. We will post the second part on Tuesday, November 20th. A major deal around the restructuring of the largest portion of Puerto Rico’s debt cleared an important legislative hurdle this month. This is the first installment of a two-part series on the COFINA debt restructuring agreement for Puerto Rico. “However, these additional collections were partly a statistical mirage, resulting from the over-estimation of the value of retail sales of the Puerto Rico Trade & Export Company,” the Institute stated. According to the government’s Fiscal Plan, as of February 2017, the outstanding value of COFINA bonds … Finally, on June 7, 2018, the Agents announced an “Agreement in Principle” to resolve the Commonwealth-COFINA dispute. First, as was widely expected, District Judge Laura Taylor Swain entered orders on February 4 and 5, respectively, approving the Commonwealth’s entry into the Commonwealth-COFINA settlement (which we reported on here) and confirming the Title III Plan of Adjustment for COFINA. Standard & Poor’s is keeping close tabs on COFINA. The GO bonds trade at 26 cents on the dollar, as of January 26, 2018, down from 59 cents on … We posted the first part on Monday, November 19th. Puerto Rico won court approval for a restructuring deal that wipes out one-third of its $18 billion in sales-tax bond debt, a milestone in its quest to fix its broken finances. The settlement would grant COFINA an ownership interest in 53.65% of the pledged sales-and-use tax, which will be used to fund debt service payments on new COFINA bonds. Puerto Rico’s Bankruptcy is considered the biggest bankruptcy case in United States History. Since then, prices of Puerto Rico GOs have diverged with 8s of 2035 issued in 2014 and 5.75s of 2041 issued in 2011 widening by $11. You can read this article in Spanish here.. It incorporated ten shell companies in Delaware in August 2015 to hold the investments in order to hide its identity, and managed to do so until The Intercept ’s David Dayen broke the story of its speculation on Puerto Rico’s debt in 2017. Presently, only the Puerto Rico General Fund and COFINA are under the protection of Title III of PROMESA. 91-2006, as amended. ... Moody’s downgraded Puerto Rico’s GO, COFINA, and other debt, citing a negative outlook. ... | September 16, 2020 At a hearing on May 9, 2018, Judge Laura Taylor Swain heard extensive oral arguments in connection with determining whether certain questions arising in the Commonwealth-COFINA Dispute (i.e., whether the (a) COFINA legislation effectively transferred the SUT revenue to COFINA, and (b) transfer of ownership related to the SUT revenue and/or enactment of such legislation violated the Puerto Rico … Puerto Rico's COFINA Bonds, Road Block To Equitable Settlements - Residents And GO Investors May End Up Paying Unnecessarily Jan. 9, 2017 6:30 AM ET by: Carl Dincesen Puerto Rico has reached agreement with a large portion of its general obligation bond holders—and the holders of the constitutionally protected “Puerto Rico Building Authority bonds.”. SAN JUAN — The Puerto Rico Sales Tax Financing Corp. (Cofina by its Spanish acronym) has issued an “Invitation to Exchange Bonds and Consent to Amendments,” dated June 10, of certain holders of sales tax revenue bonds. Photo by La Puerta. admin 0 November 20, 2018 7:10 pm Spread the love. A group of holders of Puerto Rican general obligation bonds said it is not ready to support a proposed deal to settle a key dispute in the U.S. territory's $120 billion bankruptcy. Baupost entered Puerto Rico's bond market in a big way, buying more than $900 million in COFINA bonds. (Adds statements from oversight board, governor and coalition of senior bondholders) There have been two significant developments in the ongoing restructuring case for the Commonwealth of Puerto Rico. The restructuring proposal covers the revenue bonds known as Cofinas, which make up roughly 40% of Puerto Rico's core government debt. (Credit: Wikipedia) Basing its assessment on Puerto Rico’s declining economy and population, Standard & Poor’s Ratings Services revised Monday its outlook on Puerto Rico Sales Tax Financing Corp.’s (known as COFINA) first- and second-lien bonds … Puerto Rico Update: As COFINA Restructuring Nears Finale, ... Puerto Rico GO bonds were trading at similar levels regardless of their year of issuance. The agreement concerns investors who hold bonds issued by Puerto Rico Sales Tax Financing Corporation, also known as Cofina. You can read this article in Spanish here. Puerto Rico Bond Update – Puerto Rico has No Money for Bond Payments. On Feb. 12, the debt adjustment plan for Cofina… Puerto Rico Sales Tax Financing Corp (COFINA) ... Puerto Rico's FAFAA and bond insurer Ambac also call for rejection of a bondholder proposal for deadlines to approve a plan of adjustment. When it issues debt, the funds that will be used for repayment comes directly from sales tax revenue. 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