Unsecured Creditors Objects Annulment Of $6B Of Puerto Rico's Debt

Assured Guaranty Municipal Corp., a monoliner, objected on Thursday the Financial Oversight and Management Board’s decision to seek a court order annulling general obligation debt issued in 2012 and 2014 arguing that “Commonwealth’s Series 2012 A GO Bonds insured by Assured Guaranty Municipal Corp. were issued in full compliance with applicable provisions of the Puerto Rico Constitution and related laws, including the constitutional debt limitation provision, and we believe that they are legal, valid and binding obligations of the Commonwealth. In 2012, AGM insured $369 million of 2012 A GO refunding bonds while at the same time coming off risk on $532 million of GO bonds we had previously insured. The $369 million has been included in the amounts of Puerto Rico exposure we regularly disclose,” the company said.

The company said the objection is another example of the Oversight Board continuing “to spend hundreds of millions of dollars on litigation and related expenses that run counter to the Oversight Board’s specifically legislated purpose: to achieve fiscal responsibility and capital markets access.”

“Once again, the Oversight Board is more willing to disrespect the rule of law and litigate rather than engage in meaningful negotiations to develop a realistic solution to the Commonwealth’s fiscal crisis,” the company said.

The Special Claims Committee late Monday announced that it and the Official Committee of Unsecured Creditors in Puerto Rico’s debt restructuring have filed an objection in U.S. District Court to more than $6 billion of Puerto Rico’s bonded debt.

Read more: http://www.sanjuanweeklypr.com/pdf/Jan-18-19/local.pdf
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