Groups of Puerto Rico's creditors issued a rare joint letter late on Monday opposing a plan designed to steer the island out of financial crisis, stoking friction between the U.S. territory, its investors and the board tasked with managing its finances, Reuters reported yesterday. In a letter to the federally appointed oversight board, creditors with exposure to $12 billion in Puerto Rican debt said the turnaround plan, approved by the board on March 13, violates the Puerto Rico financial rescue law known as PROMESA by ignoring legal protections on some public debt. The letter was signed by holders of constitutionally guaranteed general obligation (GO) debt; a group holding junior COFINA debt backed by sales tax revenue; and Assured Guaranty Corp, which insures $3.4 billion of Puerto Rican bonds. Lawyers representing the UBS Family of Funds and the Puerto Rico Family of Funds said yesterday that their clients, who hold roughly $652 million in accreted value of COFINA bonds, "strongly share and support many of the objections and concerns" stated in the bondholders' letter to the oversight board. The plan “simply ignores one of the enumerated requirements that Congress imposed” under PROMESA, “namely, that it respect the relative lawful priorities” of debt, the letter said.
