Judge approves fiscal board proposals to modify PRIFA, CCDA debt deals
By The Star Staff
Title III Bankruptcy Judge Laura Taylor Swain has approved the Financial Oversight and Management Board’s proposals for qualifying modifications for the Puerto Rico Infrastructure Financing Authority (PRIFA) and the Convention Center District Authority (CCDA).
Swain issued her orders last week as part of her facts and conclusions order, impacting $1.9 billion in PRIFA bonds and $384 million in CCDA bonds. The two deals were restructured under the design provided by Title VI of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), which allows for negotiated debt restructurings.
Also last week, the judge confirmed the debt adjustment plan that would restructure some $33 billion in central government and over $50 billion in pensions.
“The Oversight Board welcomes the court’s decision to approve these debt modifications,” the oversight board said in a statement. “With these changes rulings, Puerto Rico is yet another step closer to ending its long bankruptcy process under PROMESA and to moving on to stability and growth.”
The PRIFA modification reflects close to a 90% reduction of claims and saves the people of Puerto Rico over $3 billion in principal and interest payments. The CCDA modification reflects an approximate 70% reduction of claims and saves over $500 million in principal and interest payments.
If not for the oversight board’s litigation, commonwealth laws would have required the commonwealth to transfer money to PRIFA and CCDA to pay all their debt in full with interest.
CCDA and PRIFA bondholders held certain asserted clawback claims against the commonwealth for monies historically appropriated conditionally to CCDA and PRIFA. The debt modifications reflect the agreement CCDA and PRIFA bondholders reached with the oversight board to settle their asserted clawback claims in the Commonwealth Plan of Adjustment, which the court confirmed last Tuesday, and finalize terms of a restructuring of the PRIFA and CCDA bond indebtedness, the board said.