Amid negotiations with country creditors over a new debt adjustment plan, the Fiscal Control Board (JCF) today released the funds available to meet financial requirements that may arise from the realization of the debt. ‘agreement.
This was announced by the tax authority today – along with the Financial Advisory Authority and the Puerto Rico Tax Agency (Aafaf) – in a press release stating that initially, Puerto Rican government creditors provided a analysis of the cash situation in Puerto Rico and the cash available to distribute to creditors.
They indicate that, in accordance with mediation procedures, the Board responded to the creditors ’statements with a detailed cash analysis, which includes an analysis of Puerto Rico’s total cash, restricted cash and minimum balances. of cash that the government needs to maintain.
According to the Board, as of June 30, 2020, the total cash and cash equivalent of the public entity was $ 24.7 billion. about, $ 15.9 billion of this amount were in the hands of central government agencies. the $ 8.8 billion remaining belonged to public corporations, including the Puerto Rico Electric Power Authority (IS IN), the Aqueduct and Sewerage Authority of Puerto Rico (PRASA) ilat the University of Puerto Rico (UPR).
According to JCF documents, $ 5.4 billion of central government cash are restricted, including around $ 3.8 billion of federal funds related to COVID-19. After accounting for some other funds that are potentially not available, for example, unemployment funds, the Board estimated that the Government had $ 10.3 billion in unrestricted cash as of June 30, 2020.
about $ 6 billion of this unrestricted cash is contemplated as cash for creditors in the latest proposal for an amended Adjustment Plan, $ 1.5 billion is allocated to restore payments to retirees who lost their employee contributions in the defined System 2000 government contribution plan, and approx $ 650 million it is reserved for unions, retirees and other claims. The remaining funds were the minimum cash balance for government operations and other critical needs, such as interim disaster financing.
Restricted cash includes funds received from the federal government or restricted by federal law or regulation for specific uses, including funds under the CARES Act; funds belonging to third parties and held by government entities in custody or other segregated accounts; and other legally restricted funds.
Negotiations between the JCF and creditors have reportedly begun after the November 20 meeting at which they endorsed the presentation of the new adjustment plan to creditors.
The amended adjustment plan proposes the removal of the junior bond fund of the Urgent Interest Fund Corporation (Cofina) and replaces it with a contingent value instrument (CVI) of up to $ 1 billion, which would be borne only if the Sales and Use Tax (IVU) precautions exceed the projected May 2020 Certified Tax Plan. According to the Board, the new plan will allocate around $ 6 billion to creditors and about $ 5 billion in general obligation bonds. The proposed plan would also apply an 8.5% reduction to pensions in excess of $ 1,500 per month.