A final agreement to restructure Puerto Rico’s sales tax-backed bonds will be filed by Oct. 15 in federal court, where a judge overseeing the U.S. commonwealth’s bankruptcy case will decide its fate, parties to the deal said yesterday, Reuters reported. A plan support agreement between Puerto Rico, its Sales Tax Financing Corporation (COFINA), the island’s federally created oversight board, bondholders and bond insurance companies that was announced yesterday would be the first debt adjustment plan to seek court approval. Puerto Rico has been in bankruptcy court since May 2017 trying to restructure about $120 billion of debt and pension obligations. A deal with COFINA creditors surfaced earlier this summer. “The deal provides for more than a 32 percent reduction in COFINA debt, gives Puerto Rico approximately $17.5 billion in debt service savings and enables local retail bondholders in Puerto Rico to receive a significant recovery,” said Natalie Jaresko, the oversight board’s executive director, in a statement.
