GDB’s Debt Recovery Authority agrees to support proposed POA
By The Star Staff
The Financial Oversight and Management Board for Puerto Rico on Monday announced an agreement with the Government Development Bank Debt Recovery Authority (DRA) to support the proposed Plan of Adjustment (POA) that reduces the commonwealth’s debt by 80%.
The DRA agreed to settle its asserted claims against the commonwealth and the Puerto Rico Public Buildings Authority (PBA) for monies historically appropriated conditionally to the Highway and Transportation Authority (HTA), according to a statement from the oversight board. The agreement took place over the weekend and was mentioned at the first day of confirmation hearings Monday.
“The Oversight Board has worked for more than four years to negotiate consensual agreements with diverse groups of stakeholders, with the goal to lower the government’s debt to a level that is sustainable for Puerto Rico, resolving creditors’ claims and lifting a huge burden off future generations,” said the oversight board’s executive director, Natalie Jaresko.
“The support of stakeholders is essential to ending Puerto Rico’s bankruptcy,” she said. “The more classes of creditors that support the proposed Plan of Adjustment, the smoother our path to confirmation is likely to be and the sooner Puerto Rico can turn the corner.”
The DRA will receive distributions in connection with its allowed claim against the commonwealth and PBA. In addition, in connection with a future POA for the HTA, the DRA will receive a distribution on account of the bonds they hold, as well as a contingent recovery based upon asserted clawback claims and, upon confirmation and consummation of such an HTA POA, a $15 million restriction fee for agreeing to support such a plan.
Douglas Mintz, a lawyer for Cantor-Katz Collateral Monitor, confirmed that an agreement was reached and that “we have withdrawn all objections against the plan of adjustment.”