Puerto Rico in Distress

ABI Analysis

Puerto Rico Governor Pedro Pierluisi said he’s in favor of renegotiating a 2019 deal that would pull the island’s public power company, Prepa, out of bankruptcy and repay billions to bondholders, Bloomberg News reported. During a meeting of the Financial Oversight and Management Board on Friday, Pierluisi said conditions in the U.S.

Puerto Rico is poised to exit bankruptcy and begin paying bondholders again, a milestone that’s likely to boost not only the value of commonwealth debt but also other risky state and local securities, Bloomberg News reported. Puerto Rico stopped paying debt service in 2016 and then fell into the biggest bankruptcy ever in the $4 trillion municipal bond market the following year.

Puerto Rico’s House of Representatives early Friday voted down an amendment to the current operating budget that would allocate billions of dollars to investors as part of the island’s debt-cutting plan, Bloomberg News reported. The legislation failed after midnight local time on Friday by 25 to 21, one vote short of passage. Still, the U.S.

Public school teachers in Puerto Rico called off a strike Thursday, after the government agreed to increase their base salary, make a new $1,000 a month raise permanent and engage in pension negotiations, Bloomberg News reported.

Other Resources

The Financial Oversight and Management Board for Puerto Rico was created under the Puerto Rico Oversight, Management and Economic Stability Act of 2016. The Board consists of seven members appointed by the President of the United States and one ex officio member designated by the Governor of Puerto Rico. Access information on the Board, documents, videos of meetings, calendar of events and live webcasts by clicking here.