NEW YORK, May 14 (Reuters) - Puerto Rico’s biggest bondholder groups on Monday unveiled a proposal to settle a dispute covering around half of the bankrupt U.S. territory’s $71.5 billion in debt, a crucial step toward resolving the storm-ravaged island’s bankruptcy.
However, the terms of the deal were immediately rejected by Puerto Rico’s federally appointed financial oversight board, casting doubt on whether it can gain approval under the island’s bankruptcy process.
Under the deal, so-called COFINA bondholders would receive certificates entitling them to 52.5 percent of sales tax revenue, which would be owned by a newly created trust. General obligation bondholders would receive 46.2 percent of sales tax cash flows under the trust. (Reporting By Nick Brown, Editing by Daniel Bases and Chizu Nomiyama)