UPDATE 1-Puerto Rico creditor group counters island's debt exchange offer
(Adds detail of counter-offer, comment from group's lawyer, background)
By Nick Brown
SAN JUAN Feb 10 (Reuters) - Creditors of Puerto Rico's sales tax authority, COFINA, made a counter-offer on Wednesday to Puerto Rico's Feb. 1 debt exchange proposal, saying they would extend maturities but forgo cuts to principal that the original offer would entail.
The plan represents the first formal response from creditors to the debt-exchange proposal from the U.S. territory, which has been in testy negotiations with creditors for months as it struggles with a $70 billion debt load, a 45 percent poverty rate and shrinking tax base as locals flock to the U.S. mainland.
The COFINA creditors offered to reduce the amount of sales tax pledged for their bonds in the near-term, in exchange for being paid in full later. Under Puerto Rico's Feb. 1 proposal, COFINA holders would face repayment reductions of about 51 percent.
"What our plan is designed to do is take at face value what the commonwealth is saying about its liquidity needs, and try to meet them in a lawful and consensual way," Susheel Kirpalani, a lawyer for the COFINA creditors' group, said in an interview.
COFINA holders are owed about $17.3 billion overall, with senior COFINA holders owed about $7.6 billion of that. Seniors include Metropolitan Life Insurance Co, Goldentree Asset Management and Whitebox Advisors, according to a source familiar with the matter. Wednesday's plan was proposed by some of the senior holders.
A source close to another Puerto Rico creditor dismissed the COFINA plan as "self-interested."
"It's not a real, comprehensive solution," said the source, who declined to be named. "Major creditors are committed to a broad plan that works for all creditors, not one that simply serves the narrow interests of one group." Continuación...