National Takes Action to Extend PREPA Restructuring Support Agreement
June 29 2017 - 1:39PM
Business Wire
Title III Bankruptcy Filing Unnecessary and
Improper and Puts Commonwealth at Risk; PREPA RSA has Broad
Creditor Support
National to Continue Pursuing Lawsuit to
Compel Oversight Board to Comply with Obligations Under
PROMESA
National Public Finance Guarantee Corporation (National), an
indirect subsidiary of MBIA Inc. (NYSE:MBI), today announced that
it and the other supporting creditors offered the Puerto Rico
Electric Power Authority (“PREPA”) an extension of the
Restructuring Support Agreement (“RSA”) until June 30, 2017 that
included a re-lending that would have allowed PREPA to avoid a
default on July 1, 2017. The offer was delivered to Puerto Rico
Governor Ricardo Rosselló, PREPA and the Puerto Rico Fiscal Agency
& Financial Advisory Authority (”AAFAF”), but all have refused
to sign the extension.
National believes this extension and the related funding would
have provided additional time for discussions to avoid a Title III
bankruptcy filing by PREPA, which National also believes is
unnecessary and improper and would put the Commonwealth at risk by
disrupting the provision of electricity on the island.
“PREPA and the Rosselló administration have rejected the only
lifeline available on the island,” said Bill Fallon, CEO of
National Public Finance Guarantee Corporation. “They are bending to
the will of the Oversight Board. The RSA has broad creditor support
and has been approved by all required parties, including two
governors, the Puerto Rico legislature, AAFAF, the Puerto Rico
Energy Commission and the PREPA board. The Governor should stand by
his agreement that we achieved almost two months ago.”
National will continue to pursue its lawsuit in the U.S.
District Court for the District of Puerto Rico that seeks to compel
the Oversight Board to comply with its obligations under the Puerto
Rico Oversight, Management, and Economic Stability Act.
National has adequate resources, with claims-paying resources
totaling $4.6 billion at March 31, 2017, to ensure that its
policyholders will receive the full amount of the scheduled
interest and principal payments that come due on their National
insured bonds.
Forward-Looking Statements
This release includes statements that are not historical or
current facts and are “forward-looking statements” made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The words “believe,” “anticipate,” “project,”
“plan,” “expect,” “estimate,” “intend,” “will likely result,”
“looking forward” or “will continue,” and similar expressions
identify forward-looking statements. These statements are subject
to certain risks and uncertainties that could cause actual results
to differ materially from historical earnings and those presently
anticipated or projected, including, among other factors, the
possibility that MBIA Inc. or National will experience increased
credit losses or impairments on public finance obligations issued
by state, local and territorial governments and finance authorities
that are experiencing unprecedented fiscal stress; the possibility
that loss reserve estimates are not adequate to cover potential
claims; MBIA Inc.’s or National’s ability to fully implement their
strategic plan; and changes in general economic and competitive
conditions. These and other factors that could affect financial
performance or could cause actual results to differ materially from
estimates contained in or underlying MBIA Inc.’s or National’s
forward-looking statements are discussed under the “Risk Factors”
section in MBIA Inc.’s most recent Annual Report on Form 10-K,
which may be updated or amended in MBIA Inc.’s subsequent filings
with the Securities and Exchange Commission. MBIA Inc. and National
caution readers not to place undue reliance on any such
forward-looking statements, which speak only to their respective
dates. National and MBIA Inc. undertake no obligation to publicly
correct or update any forward-looking statement if it later becomes
aware that such result is not likely to be achieved.
National Public Finance Guarantee Corporation, headquartered in
Purchase, New York is the world’s largest U.S. public finance-only
financial guarantee insurance company, with offices in New York and
San Francisco. Please visit National’s website
at www.nationalpfg.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170629006099/en/
National Public Finance Guarantee CorporationMedia:Greg
Diamond, 914-765-3190orFixed-Income Investor Relations:Kevin Brown,
914-765-3385orMBIA Inc.Investor and Media Relations:Greg
Diamond, 914-765-3190
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