A group of hedge funds that hold about $3 billion of Puerto Rico sales-tax bonds released court documents showing how much of the commonwealth’s debt that each manages, Bloomberg reported yesterday. The disclosure is part of Puerto Rico’s record bankruptcy. The island is seeking to cut $74 billion sold by the commonwealth and its agencies that helped fill budget deficits as its economy shrunk in the past decade. Numerous agencies sold the bonds, which are repaid from various revenue pledges. Bondholders are now fighting over those different revenue sources. A key issue is which type of debt should receive a better recovery rate: $13.3 billion of general obligations, which have a constitutional guarantee of repayment, or $17.6 billion of bonds. The Cofina structure has a junior-lien component, and while the pool of bondholders designates itself as the senior Cofina group, some members hold junior sales-tax bonds. The firms hold a combined $2.5 billion of senior Cofinas and $602 million of junior sales-tax debt.
For updated news and analysis of Puerto Rico's debt crisis, along with current docket filings in Puerto Rico's case, be sure to visit ABI's "Puerto Rico in Distress" webpage: http://www.abi.org/PR-crisis.