Trash talking by COFINA bond coalition, in Puerto Rico debt restructuring

The COFINA Seniors Coalition, which collectively holds approximately 32% of the senior bonds issued by the Puerto Rico Sales Tax Financing Corporation (“COFINA”), provides the below comments concerning the implications of the decision to grant Bank of New York Mellon’s (“BNY Mellon” or “the Trustee”) interpleader request. Susheel Kirpalani of Quinn Emanuel Urquhart & Sullivan had the following statement: “The decision to grant BNY Mellon’s request for interpleader is a favorable outcome for COFINA senior bondholders. Although AAFAF, litigious general obligation bondholders and institutional COFINA subordinate bondholders may suggest otherwise, the reality is they have no legitimate claims to any of the funds held by the Trustee prior to payment in full to senior bondholders. The legal process that is commencing provides a much-needed forum for our group to counter other actors’ baseless arguments and thoroughly establish COFINA senior bondholders’ legal rights to the current and future funds in question. To be clear, the Court stated that the COFINA funds are to be held in trust while it determines which parties are entitled to them. Our arguments will demonstrate multiple Events of Default and the priority of payments to senior bondholders, including countless on-island retail investors and retirees dependent on their holdings. We have every intention of prevailing in court and exposing all competing interests that may have impacted the Trustee’s actions to date. To be clear, COFINA senior bondholders’ contractual and structural priority over subordinate bondholders is indisputable.”

Source: COFINA Seniors Coalition Sets the Record Straight on Implications of Recent Interpleader Ruling

About mkevane

Economist at Santa Clara University and Director of Friends of African Village Libraries.
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