After favoring and even directly advocating for local bondholders to support two previous restructuring agreements, the Bonistas del Patio (Backyard Bondholders) group said they will not support the adjustment plan for central government obligations that the Oversight Board is seeking to approve.
In a written statement, the organization said they cannot support the Board's proposal without information on what will happen to the debt that has not yet been restructured and that is mostly in the hands of Puerto Ricans.
“Puerto Rican bondholders have shown great detachment by supporting high levels of cuts to their savings invested in government bonds in past adjustment plans," said Bonistas del Patio Executive Director Jorge Irizarry. "We cannot support the plan without knowing the outcome for the rest of the debt that has not yet been restructured,” he added
According to Irizarry, about eight years ago, Puerto Ricans held about $25 billion in Puerto Rican bonds. Now, some $6.9 billion of those bonds would be in the hands of local bondholders, he said.
"We also need to define the mitigation component to the losses incurred in the restructuring process, as the government, the Senate and the House had promised to this important group of bondholders," the investment banker added.
Bonistas del Patio oppose the proposed amended adjustment plan just a week after Governor Wanda Vázquez Garced filed in a motion in court requesting to deny the Board to schedule a disclosure statement hearing for the central government payment plan.
The Board's amended adjustment plan would cut 27 percent of the debt but it would also cut 98 percent to those creditors who believed they had collateral, such as toll and slot machine revenues.