(Corrects day of the week in first and fourth paragraphs)
June 5 (Reuters) - Representatives for holders of Puerto Rican general obligation (GO) bonds and “COFINA” bonds, whose debt is backed by sales tax revenue, reached an in-principle agreement to settle a long-running dispute, according to a court filing on Tuesday.
The bondholders, who together own about half of bankrupt Puerto Rico’s $71.5 billion in bonds, have spent years disputing which group has the valid claim on revenues from the U.S. territory’s sales tax.
In May, a proposed settlement that would have split the revenues roughly evenly was snubbed by the federally appointed oversight board that manages Puerto Rico’s finances, which called it “completely unaffordable.”
As of Tuesday night, the board had not made a statement on the latest agreement.
Puerto Rico owes about $18 billion each in general obligation and COFINA debt.
The dispute between holders of constitutionally guaranteed GO debt and sales tax-backed COFINA bonds is the central legal dispute in the island’s bankruptcy, the largest in U.S. government history. (Reporting by Mekhla Raina in Bengaluru and Nick Brown in New York; Editing by Gopakumar Warrier)