The Municipal Finance Corporation, known by its Spanish acronym COFIM, is a newly created public corporation and instrumentality of the Commonwealth of Puerto Rico, attached to the Government Development Bank. COFIM is authorized to issue bonds and use other financing mechanisms to pay or refinance, directly or indirectly, in whole or in part, the debts of the municipalities of the Commonwealth payable or backed by the municipal sales and use tax.
COFIM receives, from the first revenues of the municipal sales and use tax collected, the greater of: (i) an amount computed by applying a 0.3% fixed tax rate to the total revenues collected, or (ii) a fixed amount that increases annually, known as the Annual Fixed Income. These revenues, which are deposited in COFIM’s Redemption Fund, are used to pay and secure the debt issued by COFIM. Note that municipalities impose a uniform Municipal Sales and Use Tax of 1%.
As an independent corporation, COFIM has the same powers, rights and faculties as the GDB under its Charter.
For more information about COFIM, click HERE.