• The Star Staff

UPR to extend standstill agreement period on bonds through February 2021

By The Star Staff

The University of Puerto Rico (UPR) has informed the municipal markets that it has extended the extension period of its 13th standstill agreement on certain bonds through Feb. 28, 2021.

UPR is facing prevalent financial difficulties in all agencies because of a budget shortfall.

According to a filing dated Sept. 22, the document, which is dated Sept. 18, indicated that U.S. Bank Trust National Association, as trustee, and the Fiscal Agency and Financial Advisory Authority (AAFAF) — on its own behalf and on behalf of UPR — agreed to amend the period on UPR University System refunding bonds, Series P and Q, to the aforementioned date.

The 13th standstill agreement says that in consideration for extending the compliance period through and including Feb. 28, 2021, UPR will make the certain transfers to the Trustee, U.S. Bank, to hold or to make payments or distributions as required under the Trust Agreement, and the failure to make any such payment, if not rectified within one business day, shall result in a termination of the compliance period.

The payments are $10.8 million (the October through December 2020 payment) on or before Jan. 1, 2021; $7.2 million less a credit for any amount as of Feb. 19, 2021 in the Trustee’s Bond Service Account and Reserve Account that is, in the aggregate, in excess of $65.9 million or before Feb. 26, 2021 (the “January and February 2021 Execution Version Payment”), provided that the parties have executed a forbearance agreement that extends beyond March 31, 2021.

UPR or AAFAF will provide U.S. Bank with detailed plans and specifications for repairing, replacing or reconstructing UPR property that was damaged or destroyed by Hurricane Maria as those plans are approved by UPR.

UPR will deposit all proceeds of casualty insurance policies or direct federal aid to repair damages in the university’s segregated accounts at a commercial bank to facilitate audits. After the February date, all repair funds in excess of $1 million shall be used pursuant to a written requisition stating the amount to be paid, the name of the person, firm, or corporation to whom payment is due, and the purpose for which the obligation is to be paid, and shall be signed by the finance director.

On or before the 15th calendar day of each month, UPR will submit the preceding month’s requisitions to U.S. Bank. On the 15th calendar day of each month UPR or AAFAF will provide, or cause relevant agencies to provide, U.S. Bank with all project requests, progress or other reports provided to the Federal Emergency Management Agency or to any casualty insurance company with respect to the expenditure of repair funds during the preceding month, the agreement says.

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