A U.S. federal judge yesterday approved a plan to restructure $17 billion of debt from Puerto Rico’s Sales Tax Financing Corporation, known as COFINA, marking the second deal between the bankrupt U.S. commonwealth and its creditors to win court approval, Reuters reported. Judge Laura Taylor Swain, who is hearing Puerto Rico’s bankruptcy case filed in May 2017, called the COFINA plan “a significant step on the path towards Puerto Rico’s financial recovery, economic stability, and prosperity.” The island, which is trying to restructure about $120 billion of debt and pension liabilities, won court approval in November for a consensual deal with creditors over about $4 billion of debt related to its Government Development Bank (GDB). According to Puerto Rico’s federally created oversight board, the COFINA plan will slash debt service on the sales tax-backed debt by $17.5 billion over nearly 40 years, saving the island an average $456 million annually.
