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With debt deal filed, Puerto Rico is now closer to exiting bankruptcy


By The Star Staff


The federal Financial Oversight and Management Board for Puerto Rico submitted to the Title III bankruptcy court a disclosure statement and a revised amended plan of adjustment late Thursday, further paving the way for the island’s exit from bankruptcy.


The plan would restructure some $35 billion in debt from the commonwealth, the Public Buildings Authority (PBA) and the Employees Retirement System (ERS). The court still has to rule on the reasonableness of the plan.


The third amended plan of adjustment was submitted two months after the oversight board had already submitted a plan of adjustment for the commonwealth and disclosure statement.

The latest version includes agreements reached with other creditors that were not in the March debt adjustment plan. On April 2, the oversight board reached an agreement with certain groups of holders of bonds issued by the ERS and the Bank of New York Mellon, as fiscal agent for the ERS Bonds. On May 5, the board reached an agreement with certain holders of bonds issued by the Highway and Transportation Authority (HTA), certain holders of bonds issued by the Puerto Rico Convention Center District Authority (CCDA), Assured Guaranty Corp. and Assured Guaranty Municipal Corp as bond insurers.


The plan also settles a large amount of litigation including disputes related to the validity of commonwealth and PBA bonds issued on or after 2011; disputes raised by certain holders of commonwealth bond claims, Government Development Bank (GDB) claims; and HTA asserting rights to revenues appropriated to the CCDA, Puerto Rico Infrastructure Financing Authority and Metropolitan Bus Authority revenues; and even disputes over the rum taxes.


The adjustment plan settles the debt with 65 classes of claims considering the differing nature and priority of the claims against the local entities.


The following is the distribution to creditors with respective amounts:


1. Vintage PBA Bond Claims, Vintage PBA Bond Claims (Assured), Vintage PBA Bond Claims (National), Vintage PBA Bond Claims (Other Insured), and Vintage PBA Bond Claims (Syncora) will be allowed in the aggregate amount of $2.6 billion

2. 2011 PBA Bond Claims will be allowed in the aggregate amount of $1.3 billion

3. 2012 PBA Bond Claims will be allowed in the aggregate amount of $674 million

4. Vintage CW Bond Claims and, the Vintage CW Bond Claims (Assured Guaranty), Vintage CW Bond Claims (National Public Finance), Vintage CW Bond Claims (Other Insured), and Vintage CW Bond Claims (Syncora) will be allowed in the aggregate amount of $5.8 billion

5. ERS bond claims will be allowed in the aggregate amount of $3.1 billion

6. 2011 CW bond claims and 2011 CW bond claims (Assured Guaranty) will be allowed in the aggregate amount of $76.4 million

7. 2011 CW Series D/E/PIB bond claims and 2011 CW Series D/E/PIB Bond Claims (Assured) will be allowed in the aggregate amount of $645.6 million

8. 2012 CW bond claims and 2012 CW bond claims (Assured) will be allowed in the amount of $2.9 billion

9. 2014 CW bond claims will be allowed in the amount of $3.8 billion

10. 2014 CW guarantee bond claims will be allowed in the amount of $346.2 million.

The plan also will distribute pay consummation costs and other fees for joining the plan.

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