FAQ

On October 19, 2018, the Oversight Board, as COFINA’s Title III debtor representative pursuant to PROMESA section 315(b), filed the Plan of Adjustment with the Title III Court. The Plan of Adjustment was the product of substantial negotiations reflecting various settlements and compromises, and provided for the adjustment of COFINA’s then-outstanding debts. The Plan of Adjustment became effective on February 12, 2019.

On the Effective Date, Reorganized COFINA issued two series of  COFINA Bonds: (a) the Series 2019A Bonds, which consisted of the (i) Series 2019A-1 Bonds and (ii) Series 2019A-2 Bonds and (b) the Series 2019B Bonds, which consisted of the (i) Series 2019B-1 Bonds and (ii) Series 2019B-2 Bonds.   
 
The Series 2019A-1 Bonds were issued as tax-exempt bonds, with four maturities of Current Interest Bonds (“CIBs”), and  seven maturities  of Capital Appreciation Bonds (“CABs”). The Series 2019A-2 Bonds were issued as four maturities of CIBs.   
 
The Series 2019B-1 Bonds were issued as tax-exempt bonds, with four maturities of CIBs and seven maturities of CABs.  The Series 2019B-2 Bonds were issued as four maturities of CIBs.
 
On June 10, 2019, COFINA invited holders of the Series 2019A-2 Bonds and the Series 2019B-2 Bonds (the “Invited Bonds”) to exchange their bonds for tax-exempt bonds of the same maturity and principal amount by with a reduced interest rate.  Effective August 1, 2019, holders of the Invited Bonds who accepted the invitation to so exchange, received exchanged bonds. As a result of the exchange, there are now eight maturities of the Series 2019A-2 Bonds, all of which are CIBs.  
 
The COFINA Bonds (other than the Invited Bonds that accepted COFINA’s invitation to exchange) are dated as of August 1, 2018 and will accrue or accrete interest, as applicable, from such date.  The Invited Bonds that accepted COFINA’s invitation to exchange are dated as of August 1, 2019 and will accrue interest, as applicable, from such date.

Act No. 91-2006, as amended (“Act 91”), provides that the COFINA Bonds are secured by a statutory first lien on all of COFINA’s right, title and interest in and to the Pledged Taxes (as defined in Act 91). Pursuant to Act 91, the statutory first lien automatically attached at the time the COFINA Bonds were issued, without further action or authorization by COFINA or any other entity, person, governmental authority or officer. Act 91 provides that the statutory lien is valid and binding and that it is automatically effective, binding and enforceable against all persons having claims of any kind in tort, contract or otherwise against COFINA or its assets irrespective of whether such persons have notice of such lien.