The Financial Oversight and Management Board (FOMB) announced that it has filed the sixth amended Commonwealth Plan of Adjustment for Puerto Rico that reflects new agreements with additional creditors.
The sixth amended Plan of Adjustment reflects a plan support agreement with Ambac Financial Group and Financial Guaranty Insurance Company (FGIC) to settle both their asserted clawback claims against the Commonwealth of Puerto Rico and debts issued by the Puerto Rico Infrastructure Financing Authority (PRIFA).
“With this sixth amended Plan of Adjustment, the Oversight Board has reached agreements with all monoline bond insurance companies involved in the Commonwealth Plan of Adjustment,” said the Oversight Board’s Executive Director Natalie Jaresko. “The agreement to settle the PRIFA claims provides additional support to the Plan of Adjustment prior to confirmation hearings and brings Puerto Rico another step closer to the end of its bankruptcy.”
PRIFA bondholders will receive $260 million in cash, inclusive of restriction fees and consummation costs. In addition, the agreement includes a contingent value instrument based on potential outperformance of Puerto Rico’s 5.5% Sales and Use Tax relative to projections in the 2020 Certified Fiscal Plan and Puerto Rico’s general fund rum tax collections relative to projections in the 2021 Certified Fiscal Plan. Cash consideration to all PRIFA claims reflects a fixed reduction of the amount of PRIFA claims of approximately 90%.