Assured Guaranty Ltd. and Assured Guaranty Municipal Corp. are urging the Financial Oversight and Management Board for Puerto Rico to revoke its approval of the island's "unlawful" revised fiscal plan.
The revised fiscal plan violates several significant statutory requirements of the Puerto Rico Oversight Management and Economic Stability Act, or PROMESA, as well as the laws of constitutions of the U.S. and Puerto Rico, according to a letter signed by the companies' president and CEO, Dominic Frederico.
Frederico wrote that the companies withdrew their legal challenge to the original fiscal plan, believing that the oversight board will redraft it with the input and support of creditors. But he claims that the oversight board created the revised fiscal plan without collaborating with creditors and without appropriate transparency of information and assumptions.
Additionally, the revised fiscal plan used "flawed" methodologies and assumptions that lead to an "artificially pessimistic" projection of the island's future revenues, economic growth and debt capacity, Frederico wrote.
If the approval of the revised fiscal plan is revoked, the companies are still willing to work with the oversight board and other stakeholders in order to develop a comprehensive fiscal plan that complies with PROMESA and with the U.S. and commonwealth constitutions, Frederico wrote.
The Puerto Rico oversight board did not immediately respond to a request for comment.