National Public Finance Guarantee Corp. Files Adversary Complaint to Compel PREPA to Deposit Pledged Special Revenues with Bo...
August 08 2017 - 8:00AM
Business Wire
Failure to Remit Funds is a Violation of PREPA Trust
Agreement, PROMESA and the U.S. Constitution
National Public Finance Guarantee Corporation (“National”), an
indirect subsidiary of MBIA Inc. (NYSE:MBI), said today that
National and other creditors (“the Creditor Group”) have filed an
Adversary Complaint in the U.S. District Court for the District of
Puerto Rico seeking to compel the Puerto Rico Electric Power
Authority (“PREPA”) to deposit revenues with the bond Trustee as
required by the terms of the PREPA Trust Agreement, PROMESA and the
U.S. Constitution.
“PREPA has a clear and unambiguous legal obligation to turn over
pledged revenues to the bond Trustee, and that obligation holds
during a Title III proceeding,” said Bill Fallon, CEO of National
Public Finance Guarantee Corporation. “PREPA’s obligation to remit
these funds resumed upon PREPA’s and the Oversight Board’s
decisions to walk away from a consensual agreement that was
supported by almost 70 percent of its creditors. National intends
to hold PREPA accountable for its actions.”
PROMESA protects revenue bondholders by specifically
incorporating the special revenue protections of the U.S.
Bankruptcy Code into Title III. These protections guarantee that
the Creditor Group receives the benefit of its bargain by
protecting its lien after a Title III filing, and by ensuring the
payment of debt service on their bonds without interference from
the automatic stay.
Mr. Fallon continued, “The PREPA special revenue bonds benefit
from well-established distinctive protections under bankruptcy law,
and National intends to vigorously exercise its rights and remedies
as an insurer of those 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,” “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, an indirect
subsidiary of MBIA Inc. (NYSE: MBI), is headquartered in Purchase,
New York and provides financial guarantee insurance for the U.S.
public finance market. Please visit National’s website at
www.nationalpfg.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170808005517/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
MBIA (NYSE:MBI)
Historical Stock Chart
From Mar 2024 to Apr 2024
MBIA (NYSE:MBI)
Historical Stock Chart
From Apr 2023 to Apr 2024