The deadline for bond insurer withdrawal of support for the Puerto Rico central government bond Plan Support Agreement was pushed back to 5 p.m. April 5 from 5 p.m. March 31.
The relevant PSA covered general obligation and Public Building Authority bonds. It is a key component of the overall plan of adjustment.
The Puerto Rico Oversight Board posted a message to EMMA Wednesday saying, “in connection with the ongoing mediation regarding a plan of adjustment, it has agreed to extend the date set forth in Sections 7.1(g) and (h) of the Plan Support Agreement by which (a) Assured Guaranty Corp. and Assured Guaranty Municipal Corp. and (b) National Public Finance Guarantee Corporation, respectively, may terminate the Plan Support Agreement, solely as to such entities, up to and including April 5, 2021 at 5:00 p.m. (EDT).”
For the deal to go forward the PSA specifies it has to get the support of holders of at least 70% of the GO and PBA debt. The board has said it has this level of support if one includes the support of Assured Guaranty and NPFG. Since the insurers insure 15% of this debt, it is unclear if the deal would have sufficient backing without their endorsement.