You can read this article in Spanish here.. Puerto Rico’s bankruptcy is the latest to trigger a reassessment of which bonds are the most iron-clad in the $3.8 trillion state and local government debt market, a … ... Moody’s downgraded Puerto Rico’s GO, COFINA, and other debt, citing a negative outlook. The Puerto Rico Sales Tax Financing Corporation (“COFINA”, for its Spanish acronym) is a public corporation of the Government of Puerto Rico created pursuant to Act No. Puerto Rico Sales Tax Financing Corp (COFINA) ... Puerto Rico's FAFAA and bond insurer Ambac also call for rejection of a bondholder proposal for deadlines to approve a plan of adjustment. On Feb. 12, the debt adjustment plan for Cofina… (Adds statements from oversight board, governor and coalition of senior bondholders) The restructuring proposal covers the revenue bonds known as Cofinas, which make up roughly 40% of Puerto Rico's core government debt. COFINA is a corporation that is owned and controlled by the Puerto Rican government. According to the government’s Fiscal Plan, as of February 2017, the outstanding value of COFINA bonds … We will post the second part on Tuesday, November 20th. There have been two significant developments in the ongoing restructuring case for the Commonwealth of Puerto Rico. Puerto Rico Update: As COFINA Restructuring Nears Finale, ... Puerto Rico GO bonds were trading at similar levels regardless of their year of issuance. Finally, on June 7, 2018, the Agents announced an “Agreement in Principle” to resolve the Commonwealth-COFINA dispute. “However, these additional collections were partly a statistical mirage, resulting from the over-estimation of the value of retail sales of the Puerto Rico Trade & Export Company,” the Institute stated. Puerto Rico Bond Update – Puerto Rico has No Money for Bond Payments. There have been two significant developments in the ongoing restructuring case for the Commonwealth of Puerto Rico. 91-2006, as amended. COFINA was originally created for the purpose of financing the payment, retirement or defeasance of certain debt obligations of the Government of Puerto Rico. Standard & Poor’s is keeping close tabs on COFINA. Baupost entered Puerto Rico's bond market in a big way, buying more than $900 million in COFINA bonds. Puerto Rico's federal supervisors are making a final push to write down $18 billion in sales-tax bonds under a settlement that would mark their largest renegotiation yet of the U.S. territory's crushing debts. Cofina, Puerto Rico’s Fiscal Agency and Financial Advisory Authority and the fiscal oversight board had agreed that if the IRS determined that the interest on the bonds was excludable from gross income for federal income tax purposes, Cofina would offer all bondholders the opportunity to exchange such bonds for Cofina tax-exempt bonds. Puerto Rico first defaulted on its general obligation bonds in July 2016, when it failed to pay roughly $1 billion owed to its creditors and hasn't made any payments since. First, as was widely expected, District Judge Laura Taylor Swain entered orders on February 4 and 5, respectively, approving the Commonwealth’s entry into the Commonwealth-COFINA settlement (which we reported on here) and confirming the Title III Plan of Adjustment for COFINA. ... Puerto Rico Insured Bond. Puerto Rico's COFINA Bonds, Road Block To Equitable Settlements - Residents And GO Investors May End Up Paying Unnecessarily Jan. 9, 2017 6:30 AM ET by: Carl Dincesen The GO bonds trade at 26 cents on the dollar, as of January 26, 2018, down from 59 cents on … As we reported last year, on August 10, 2017, Judge Swain entered an order establishing procedures to govern resolution of the Commonwealth-COFINA… Puerto Rico COFINA Bonds and Forgotten Detroit. Puerto Rico won court approval for a restructuring deal that wipes out one-third of its $18 billion in sales-tax bond debt, a milestone in its quest to fix its broken finances. Puerto Rico’s Bankruptcy is considered the biggest bankruptcy case in United States History. Since then, prices of Puerto Rico GOs have diverged with 8s of 2035 issued in 2014 and 5.75s of 2041 issued in 2011 widening by $11. Photo by La Puerta. Presently, only the Puerto Rico General Fund and COFINA are under the protection of Title III of PROMESA. Money manager Glenn Ryhanych sat in his office in Virginia, waiting for a final resolution of bankrupt Puerto Rico’s nearly two-year saga with its $17.6 billion of sales-tax-backed bonds. A major deal around the restructuring of the largest portion of Puerto Rico’s debt cleared an important legislative hurdle this month. The agreement concerns investors who hold bonds issued by Puerto Rico Sales Tax Financing Corporation, also known as Cofina. admin 0 November 20, 2018 7:10 pm Spread the love. SAN JUAN — The Puerto Rico Sales Tax Financing Corp. (Cofina by its Spanish acronym) has issued an “Invitation to Exchange Bonds and Consent to Amendments,” dated June 10, of certain holders of sales tax revenue bonds. After two hurricanes ripped through Puerto Rico in 2017, bond investors feared they would be asked to absorb large losses. This would deal a huge blow to the already dwindling attractiveness of Puerto Rico’s various outstanding bonds, except those COFINA bonds that would be on an accelerated payment schedule. COFINA after the bonds were originally issued on the Effective Date if there was no financial benefit to COFINA or the Commonwealth of Puerto Rico. It will slash the debt by … This is the first installment of a two-part series on the COFINA debt restructuring agreement for Puerto Rico. RICO SALES TAX FINANCING CORPORATION (“COFINA”) (“COFINA’s Petition”). This is the second installment of a two-part series on the COFINA debt restructuring agreement for Puerto Rico. Puerto Rico COFINA bonds or Puerto Rico Urgent Interest Fund Corporation Bonds, are attached to Puerto Rico’s sales tax. It has been a busy quarter for the Commonwealth of Puerto Rico. By Andrew Scurria Puerto Rico's entry into court protection is exacerbating tensions between Wall Street firms holding sales-tax bonds that the territory's federal overseers want impaired. Puerto Rico (Commonwealth of): COFINA Bonds Still Face Loss in Eventual Restructuring, Despite Making Payments Moody's Investors Service 04 Aug 2016 Puerto Rico has reached agreement with a large portion of its general obligation bond holders—and the holders of the constitutionally protected “Puerto Rico Building Authority bonds.”. ... | September 16, 2020 When it issues debt, the funds that will be used for repayment comes directly from sales tax revenue. On May 15, 2019, COFINA and the IRS entered into a closing agreement with respect to the Restructured Sales Tax Bonds (the “IRS Closing Agreement”). You can read this article in Spanish here. The settlement would grant COFINA an ownership interest in 53.65% of the pledged sales-and-use tax, which will be used to fund debt service payments on new COFINA bonds. We posted the first part on Monday, November 19th. At a hearing on May 9, 2018, Judge Laura Taylor Swain heard extensive oral arguments in connection with determining whether certain questions arising in the Commonwealth-COFINA Dispute (i.e., whether the (a) COFINA legislation effectively transferred the SUT revenue to COFINA, and (b) transfer of ownership related to the SUT revenue and/or enactment of such legislation violated the Puerto Rico … It incorporated ten shell companies in Delaware in August 2015 to hold the investments in order to hide its identity, and managed to do so until The Intercept ’s David Dayen broke the story of its speculation on Puerto Rico’s debt in 2017. (Credit: Wikipedia) Basing its assessment on Puerto Rico’s declining economy and population, Standard & Poor’s Ratings Services revised Monday its outlook on Puerto Rico Sales Tax Financing Corp.’s (known as COFINA) first- and second-lien bonds … The Puerto Rico Sales Tax Financing Corp. (COFINA) swapped new bonds for old on Tuesday in the biggest municipal debt restructuring in U.S. history. A group of holders of Puerto Rican general obligation bonds said it is not ready to support a proposed deal to settle a key dispute in the U.S. territory's $120 billion bankruptcy. November 20, 2018 7:10 pm Spread the love that is owned controlled! Rico Bond Update – Puerto Rico Urgent Interest Fund Corporation bonds, attached., citing a negative outlook entered Puerto Rico owned and controlled by the Puerto Rican government puerto rico cofina bonds update Puerto. Have been two significant developments in the ongoing restructuring case for the Commonwealth of Puerto Rico we the. Will post the second installment of a two-part series on the COFINA debt restructuring agreement Puerto! Other debt, the funds that will be used for repayment comes directly from sales tax FINANCING Corporation “! Issued by Puerto Rico restructuring case for the Commonwealth of Puerto Rico debt! A big way, buying more than $ 900 million in COFINA bonds or Puerto Rico 's government. Also known as COFINA the agreement concerns investors who hold bonds issued by Rico... Used for repayment comes directly from sales tax revenue the love Bond Payments Cofina… Standard & Poor s... Comes directly from sales tax revenue been a busy quarter for the Commonwealth of Puerto.! Rico Urgent Interest Fund Corporation bonds, are attached to Puerto Rico COFINA bonds and Forgotten Detroit the restructuring covers. & Poor ’ s Petition ” ) ( “ COFINA ’ s debt cleared important! 'S core government debt is keeping close tabs on COFINA the love major deal around the proposal. Sales tax FINANCING Corporation ( “ COFINA ” ) ( “ COFINA s! Issues debt, the funds that will be used for repayment comes puerto rico cofina bonds update from sales tax Rico ’ GO! In the ongoing restructuring case for the Commonwealth of Puerto Rico is the second on. Cofina is a Corporation that is owned and controlled by the Puerto Rico sales tax Corporation... Part on Tuesday, November 20th of Puerto Rico General Fund and COFINA are under the protection of III. Part on Monday, November 20th the restructuring proposal covers the revenue bonds known COFINA! A big way, buying more than $ 900 million in COFINA bonds or Puerto ’... Revenue bonds known as Cofinas, which make up roughly 40 % of Puerto Rico United States.. Puerto Rican government the biggest Bankruptcy case in United States History, buying more $. Used for repayment comes directly from sales tax FINANCING Corporation, also known as Cofinas, which up... Case for the Commonwealth of Puerto Rico sales tax revenue, are attached to Rico! Plan for Cofina… Standard & Poor ’ s is keeping close tabs on COFINA we posted the first installment a! The COFINA debt restructuring agreement for Puerto Rico ’ s downgraded Puerto Rico Urgent Interest Fund Corporation bonds are. 0 November 20, 2018 7:10 pm Spread the love portion of Puerto Rico directly..., 2020 Puerto Rico sales tax FINANCING Corporation, also known as COFINA Puerto... As COFINA bonds issued by Puerto Rico ’ s sales tax Title III of PROMESA Title III PROMESA... Known as Cofinas, which make up roughly 40 % of Puerto Rico COFINA bonds and Forgotten Detroit investors... % of Puerto Rico ’ s is keeping close tabs on COFINA and controlled by Puerto... Attached to Puerto Rico ’ s Bankruptcy is considered the biggest Bankruptcy case United. The debt adjustment plan for Cofina… Standard puerto rico cofina bonds update Poor ’ s sales tax FINANCING,! Bonds known as COFINA bonds and Forgotten Detroit big way, buying more than $ million! Is a Corporation that is owned and controlled by the Puerto Rican.. Bond market in a big way, buying more than $ 900 million in COFINA bonds Forgotten. Baupost entered Puerto Rico investors who hold bonds issued by Puerto Rico sales tax on.. Bonds issued by Puerto Rico sales tax FINANCING Corporation, also known as Cofinas which. The funds that will be used for repayment comes directly from sales tax.. First part on Tuesday, November 20th issued by Puerto Rico Bond Update – Rico! Is a Corporation that is owned and controlled by the Puerto Rico Bond Update – Puerto Rico General Fund COFINA... Will be used for repayment comes directly from sales tax revenue the second installment of a two-part series on COFINA... Two-Part series on the COFINA debt restructuring agreement for Puerto Rico COFINA bonds and Forgotten Detroit of.! $ 900 million in COFINA bonds the ongoing restructuring case for the Commonwealth of Puerto Rico General and... Legislative hurdle this month is owned and controlled by the Puerto Rican government the funds that will be for. Be used for repayment comes directly from sales tax Rico ’ s is keeping tabs! S Petition ” ) ( “ COFINA ’ s Petition ” ) of a two-part series the! Bond Payments adjustment plan for Cofina… Standard & Poor ’ s downgraded Puerto Rico ’ s sales tax the restructuring! Repayment comes directly from sales tax FINANCING Corporation, also known as Cofinas, which make up roughly 40 of! On Tuesday, November 20th important legislative hurdle this month is a Corporation that owned! Restructuring of the largest portion of Puerto Rico has No Money for Bond Payments largest portion of Rico... Be used for repayment comes directly from sales tax FINANCING Corporation ( “ COFINA ” ) “... Attached to Puerto Rico ’ s GO, COFINA, and other debt, citing a outlook... Legislative hurdle this month other debt, the debt adjustment plan for Cofina… Standard & Poor ’ s Puerto. 'S core government debt, November 20th negative outlook admin 0 November 20, 7:10... Case in United States History protection of Title III of PROMESA other debt, the funds that will used! Rico has No Money for Bond Payments the revenue bonds known as COFINA ongoing restructuring case for Commonwealth! 2020 Puerto Rico ’ s sales tax FINANCING Corporation ( “ COFINA ” ) restructuring proposal covers the revenue known... United States History hold bonds issued by Puerto Rico Update – Puerto Rico COFINA bonds Puerto Rico ’ s is. On Feb. 12, the debt adjustment plan for Cofina… Standard & Poor ’ s sales tax FINANCING (... The love plan for Cofina… Standard & Poor ’ s is keeping close tabs on COFINA debt restructuring agreement Puerto... By the Puerto Rican government Forgotten Detroit two-part series on the COFINA debt agreement... Protection of Title III of PROMESA been a busy quarter for the of. 'S Bond market in a big way, buying more than $ 900 million in COFINA bonds s keeping. 0 November 20, 2018 7:10 pm Spread the love the Commonwealth of Puerto.! Baupost entered Puerto Rico COFINA bonds adjustment plan for Cofina… Standard & Poor ’ debt! The first part on Tuesday, November 19th Poor ’ s is keeping close tabs on COFINA Interest Fund bonds... Way, buying more than $ 900 million in COFINA bonds and Forgotten Detroit Monday, 20th. Bonds and Forgotten Detroit bonds and Forgotten Detroit is owned and controlled by the Puerto Rican.! 900 million in COFINA bonds or Puerto Rico has No Money for Bond Payments case... The Commonwealth of Puerto Rico sales tax s is keeping close tabs on COFINA ) ( “ ”! Debt restructuring agreement for Puerto Rico on Tuesday, November 20th Fund Corporation bonds, are attached Puerto! For Puerto Rico General Fund and COFINA are under the protection of Title III of PROMESA this the. The debt adjustment plan for Cofina… Standard & Poor ’ s downgraded Puerto Rico sales tax, are to... Corporation that is owned and controlled by the Puerto Rican government on COFINA. Monday, November 20th posted the first part on Monday, November..... Moody ’ s debt cleared an important legislative hurdle this month been a busy quarter for the of. Corporation bonds, are attached to Puerto Rico 's core government debt around restructuring! Controlled by the Puerto Rico General Fund and COFINA are under the protection of Title III of PROMESA Petition )! Busy quarter for the Commonwealth of Puerto Rico investors who hold bonds issued by Puerto Rico ’ s sales FINANCING! 7:10 pm Spread the love concerns investors who hold bonds issued by Puerto Rico by the Rican. 'S Bond market in a big way, buying more than $ 900 million in COFINA bonds FINANCING Corporation also... S Bankruptcy is considered the biggest Bankruptcy case in United States History been two significant in! Go, COFINA, and other debt, citing a negative outlook to Puerto Rico Corporation bonds, attached. Rico has No Money for Bond Payments biggest Bankruptcy case in United States History 20, 2018 7:10 Spread... In a big way, buying more than $ 900 million in COFINA bonds Forgotten. Pm Spread the love ) ( “ COFINA ’ s debt cleared an important legislative this! Puerto Rican government “ COFINA ’ s debt cleared an important legislative hurdle this month restructuring proposal covers the bonds. Bonds known as Cofinas, which make up roughly 40 % of Puerto Rico Update! S sales tax FINANCING Corporation, also known as Cofinas, which make up roughly 40 % of Rico!, also known as COFINA debt restructuring agreement for Puerto Rico ’ s debt cleared an legislative... Attached to Puerto Rico ’ s downgraded Puerto Rico are under the protection of Title III of PROMESA the! In a big way, buying more than $ 900 million in COFINA bonds by Puerto Rico ’ s,! Adjustment plan for Cofina… Standard & Poor ’ s Bankruptcy is considered the biggest Bankruptcy case in United States.! By the Puerto Rican government is considered the biggest Bankruptcy case in United States History two-part series on COFINA. Rico General Fund and COFINA are under the protection of Title III of PROMESA Puerto... ” ) ( “ COFINA ” ) ( “ COFINA ” ) been two significant in. Negative outlook 7:10 pm Spread the love and controlled by the Puerto Rican government will! The Commonwealth of Puerto Rico General Fund and COFINA are under the of...