• The San Juan Daily Star

COFINA meets debt payments for 3rd straight year


Carlos M. Yamín, executive director of the Puerto Rico Sales Tax Financing Corp.

By The Star Staff


The Puerto Rico Sales Tax Financing Corp. (COFINA by its Spanish acronym) confirmed that sales and use taxes received and deposited between July 1, 2021 and Oct. 15, 2021 with the Bank of New York Mellon (BNY), as Trustee for the COFINA bonds, totaled $472.6 million, which equals the amount of sales and use taxes owned by COFINA for fiscal year (FY) 2022.


It is the third year in a row since COFINA’s debt restructuring that the entity has met debt payments pursuant to Act 241-2018 and COFINA’s Third Amended Title III Plan of Adjustment (the COFINA Plan of Adjustment) confirmed by the U.S. District Court for the District of Puerto Rico as part of Title III of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). COFINA received the sales and use taxes, which were determined to be its property.


In FYs 2020 and 2021, the total COFINA revenues owned by COFINA for such periods were $436.9 million and $454.4 million, respectively. They were received and deposited with BNY between July 1, 2019 and Nov. 21, 2019 and between July 1, 2020 and Oct. 19, 2020, respectively.


“COFINA’s independent board of directors and its management are pleased that this milestone was achieved for the third consecutive year, as it evidences COFINA’s successful restructuring,” COFINA Executive Director Carlos M. Yamín said.


COFINA also announced that it has received and released the completed audit of its financial statements for fiscal year 2021 and has posted the audit on the Municipal Securities and Rulemaking Board Electronic Municipal Market Access, or EMMA, website.


“The completion of the audit in the month of October for its fiscal year ended June 30th for the second consecutive year continues to demonstrate COFINA’s commitment to transparency and meeting its obligations to its bondholders,” Yamín said. “Under the leadership of its board of independent directors, COFINA has become the first issuer in the Commonwealth of Puerto Rico to publish its fiscal year 2021 audited financial statements.”


Additionally, COFINA announced that on Oct. 4 the U.S. Supreme Court denied an appeal presented by COFINA’s junior bondholders on April 2, 2021 challenging the validity of the COFINA Plan of Adjustment under PROMESA.


The petition challenged the U.S. Court of Appeals for the First Circuit’s decision to uphold Judge Laura Taylor Swain’s order confirming the COFINA Plan of Adjustment. The First Circuit’s March 2, 2021 decision concluded that efforts to revoke the COFINA Plan of Adjustment were barred under the doctrine of equitable mootness because the plan has already been implemented. The U.S. Supreme Court’s decision conclusively resolves the last remaining challenge to the COFINA Plan of Adjustment.


“COFINA’s independent board of directors and its management are pleased that the U.S. Supreme Court decided not to hear the last appeal challenging the validity of the COFINA Plan of Adjustment,” Yamín said. “The court’s decision marks the end to possible challenges to the COFINA Plan of Adjustment and reaffirms the Corporation’s successful restructuring.”


The island government is expected to undergo its own debt restructuring if the seventh debt adjustment plan that would restructure some $35 billion in debt is approved later this year. Afterwards, the government will be left with the restructuring of the $9 billion debt of the Puerto Rico Electric Power Authority and the restructuring of the Highway and Transportation Authority.