Main Street Bondholders Calls on Congress to Reject Updated PROMESA Legislation

WASHINGTON, May 19, 2016 /PRNewswire-USNewswire/ -- Main Street Bondholders is calling on Members of Congress to reject the updated "Puerto Rico Oversight, Management, and Economic Stability Act," which was introduced by Representative Sean Duffy late last night.

"The updated legislation falls far short of respecting the rights of Puerto Rico's senior and retiree bondholders, the rule of law, and Puerto Rico's own Constitution," said 60 Plus Association Vice President Matthew Kandrach. "Instead of firmly addressing key issues in a way that would safeguard the American people, this bill instead punts all meaningful responsibilities and decision-making powers to a Super Control Board, empowering it to rip off the retirees invested in Puerto Rican bonds at its sole discretion."

The bill gives an all-powerful Super Control Board the authority to abrogate the rights of bondholders by allowing it to unilaterally withhold any and all payment due to them, and by paving the way for the board to prioritize the Puerto Rican Government's $46 billion in pension liabilities over any and all classes of bondholders, including those with absolute constitutional priority. These shortcomings are made only more glaring by the fact that the bill contains an even more draconian version of the unprecedented legal stay than was in the previous draft.

"Congress is simply allowing an appointed body to force seniors and retirees to foot the bill for Puerto Rico's $46 billion pension liability mess. This does not equate to respecting the terms under which bondholders lent the Commonwealth money, it is a bailout of government pensions on the backs of senior and retiree bondholders," said Kandrach. "For any legislation to be workable, it must explicitly uphold the constitutional rights of Puerto Rico's bondholders, and must not force them to forfeit their right to legal recourse for a breach of clear contractual terms."

Main Street Bondholders Coalition is a project of the 60 Plus Association, and is comprised of small bondholders from across America who are committed to a policy process that returns Puerto Rico to sound financial management, respect for the rule of law, and the protection of their retirement savings.

SOURCE Main Street Bondholders