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Assured Guaranty joins deal for Puerto Rico sales tax bond split

Assured Guaranty Municipal Corp. has joined a restructuring support agreement related to the division of future Puerto Rico sales and use tax revenues among holders of certain senior and subordinate bonds.

Per terms of the agreement, senior creditors will recover over 90% of their claims, while subordinate bondholders will get back about 60% in the form of new senior closed lien COFINA bonds. The recovery rates include fees for parties to the agreement.

The agreement applies to the sales tax revenues allocated to COFINA under a previous agreement between court-appointed agents for the bonds and Puerto Rico. The agreement covers approximately $10 billion of COFINA debt.

Assured Guaranty insures about $273 million of outstanding subordinate COFINA bonds. It will sell its share of the new debt to public capital markets.

MBIA Inc. also supports the agreement.