Lawyers for Puerto Rico's government are drafting a forbearance agreement that could allow the U.S. territory to avoid invoking bankruptcy protections in the short-term, Reuters reported on Friday. Puerto Rico and its creditors wrapped up roughly a week's worth of mediated talks in New York, aimed at striking a deal to restructure much of the $70 billion in debt the island cannot pay. It remains unclear if creditors would support such an offer to extend talks past a May 1 deadline to reach an agreement. After that date, Puerto Rico could face lawsuits from creditors or seek a court-sanctioned restructuring process akin to U.S. bankruptcy, a provision of the 2016 rescue law known as PROMESA. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.