Commonwealth launches bondholder registry initiative

Written by  //  June 16, 2016  //  Government  //  No comments

The Government Development Bank for Puerto Rico and the Puerto Rico Fiscal Agency and Financial Advisory Authority, has been working during the past six months on this initiative. (Credit: © Mauricio Pascual)

The Government Development Bank for Puerto Rico and the Puerto Rico Fiscal Agency and Financial Advisory Authority, has been working during the past six months on this initiative. (Credit: © Mauricio Pascual)

The government of Puerto Rico announced Wednesday the launch of an a bondholder registry to improve and facilitate communications with more than 500,000 creditors holding debt issued by the Commonwealth and its public corporations and instrumentalities.

The Government Development Bank for Puerto Rico, in conjunction with the Puerto Rico Fiscal Agency and Financial Advisory Authority, has been working during the past six months with Bondholder Communications Group on this initiative, which is an integral component of the broader efforts to resolve the Commonwealth’s unprecedented fiscal and economic crisis, the government said in a press release.

“Substantial progress has been made since March 2016. Close to 300 brokerages and banks have provided the Commonwealth’s representatives with the contact information for approximately 60 percent of the beneficial holders of outstanding bonds issued by the Commonwealth and its public corporations and instrumentalities—corresponding to slightly more than 300,000 investor accounts,” the government said in the statement.

“Through the month of June 2016, these financial institutions will be transmitting letters to all remaining investors holding outstanding bonds and inviting them to register their bonds with the Registry,” it said.

The Registry was created to help bondholders stay informed about developments with respect to Puerto Rico’s fiscal and economic crisis. Puerto Rico has 17 separate bond issuing entities that have approximately 200 separate bond issuances outstanding.

These bonds are, in turn, divided into over 1,000 CUSIPS, a system used to identify most financial instruments, including: stocks of all registered U.S. and Canadian companies, commercial paper, and U.S. government and municipal bonds.

“Given the numerous and varied investors in Puerto Rico, the Commonwealth believes it is vital to ensure that all investors are able to receive relevant updates and information regarding developments in Puerto Rico,” the government said.

The Registry also seeks to facilitate bondholder participation and collective action. Bondholders recorded in the Registry may be better able to actively and timely participate in bondholder votes and other bondholder actions by removing the need to act through third-party intermediaries and facilitating direct communication with the issuers.

Information in the Registry will be confidential and participation in the Registry will not affect bondholders’ existing communications preferences with other investments, the government said.

“Data recorded in the Registry will be kept strictly confidential and used only for official communications between Puerto Rico and its investors. If a bondholder opts to include their information in the Registry, this will not affect such bondholder’s existing preferences with respect to direct corporate communications from other corporations in which it holds investments, and will only be used to supplement the Registry with information on its bond holdings,” the government concluded.

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