Puerto Rico
Cooperation Agreement Regarding PREPA Plan Opposition Amended, Extended to March 31, 2025, After National Joins; Signatories Now Represent More Than 61% of Outstanding Bonds
Mon 08/19/2024 13:41 PM
Relevant Document:
Joint Information Motion
The cooperation agreement among bondholder parties GoldenTree Asset Management, Syncora Guarantee, Assured Guaranty Inc., certain members of the PREPA ad hoc bondholder group and recent addition National Public Finance Guarantee Corp. regarding opposition to the Puerto Rico Electric Power Authority’s, or PREPA’s, Title III plan of adjustment and discussions regarding alternative plans or transactions has been amended and extended to March 31, 2025, from Sept. 30, according to a joint informative motion filed today.
The filing states that National joined the agreement on July 12 - nine days after the former settling creditor and plan supporter disclosed in a joint status report that it would not support plan amendments proposed by the PROMESA oversight board - and that the parties to the cooperation agreement now “hold or insure over 61 percent of the outstanding bonds” issued under the trust agreement.
The cooperation agreement amendment modifies the bondholder threshold required for certain actions under the agreement, including termination because the requisite bondholders have determined to support a potential transaction, as follows:
The amendment also modifies the definition of potential transaction as follows:
Today’s filing arrives on the heels of a second amendment to the forward delivery bond purchase agreement among the oversight board and bondholders BlackRock, Whitebox, Taconic, Franklin and Nuveen that extended the expected closing date of the sale of the $1.632 billion of Series 2024B restructured power revenue bonds that PREPA proposes to issue in connection with its plan to Oct. 1.
In July, Judge Laura Taylor Swain stayed PREPA plan confirmation and bond-rights-related litigation in the Title III court and ordered the case parties, including nonsettling bondholders, into mediation after the decision by the U.S. Court of Appeals for the First Circuit regarding the nature, scope and amount of the PREPA bondholders’ claim.
Joint Information Motion
The cooperation agreement among bondholder parties GoldenTree Asset Management, Syncora Guarantee, Assured Guaranty Inc., certain members of the PREPA ad hoc bondholder group and recent addition National Public Finance Guarantee Corp. regarding opposition to the Puerto Rico Electric Power Authority’s, or PREPA’s, Title III plan of adjustment and discussions regarding alternative plans or transactions has been amended and extended to March 31, 2025, from Sept. 30, according to a joint informative motion filed today.
The filing states that National joined the agreement on July 12 - nine days after the former settling creditor and plan supporter disclosed in a joint status report that it would not support plan amendments proposed by the PROMESA oversight board - and that the parties to the cooperation agreement now “hold or insure over 61 percent of the outstanding bonds” issued under the trust agreement.
The cooperation agreement amendment modifies the bondholder threshold required for certain actions under the agreement, including termination because the requisite bondholders have determined to support a potential transaction, as follows:
The amendment also modifies the definition of potential transaction as follows:
Today’s filing arrives on the heels of a second amendment to the forward delivery bond purchase agreement among the oversight board and bondholders BlackRock, Whitebox, Taconic, Franklin and Nuveen that extended the expected closing date of the sale of the $1.632 billion of Series 2024B restructured power revenue bonds that PREPA proposes to issue in connection with its plan to Oct. 1.
In July, Judge Laura Taylor Swain stayed PREPA plan confirmation and bond-rights-related litigation in the Title III court and ordered the case parties, including nonsettling bondholders, into mediation after the decision by the U.S. Court of Appeals for the First Circuit regarding the nature, scope and amount of the PREPA bondholders’ claim.
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