Puerto Rico highway bond tolls are exempt from clawback, insurer says

New York, July 21 – Toll revenues pledged as collateral for bonds issued by Puerto Rico Highways and Transportation Authority should be exempt from clawback, bond insurer Assured Guaranty Ltd. asserted in a lawsuit filed Thursday.

The insurance company said that the tolls are not subject to clawback for payment of Puerto Rico’s general obligation debt under the commonwealth’s constitution.

In filing the suit in federal district court in Puerto Rico, Assured Guaranty is challenging executive orders issued by Puerto Rico that divert the toll revenues, according to a news release.

Assured Guaranty’s subsidiaries Assured Guaranty Municipal Corp. and Assured Guaranty Corp. are seeking relief from the stay provided by the Puerto Rico Oversight, Management and Economic Stability Act.

They are also seeking a declaration that the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act is preempted by federal bankruptcy law and that the executive orders diverting the pledged toll revenues are preempted by the oversight act and violate the U.S. Constitution.

The insurer is also seeking damages for the value of toll revenues diverted and injunctive relief prohibiting the defendants from taking any further action under the executive orders.

Assured Guaranty is a Hamilton, Bermuda-based insurance company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.