Puerto Rico in Distress

ABI Analysis

Puerto Rico wants insurers such as Assured Guaranty Ltd. and MBIA Inc. to guarantee some of the $2.9 billion of bonds that it plans to sell to stave off insolvency, Bloomberg News reported yesterday.

A chapter 9 solution to Puerto Rico’s economic and financial woes, as the House Judiciary Committee is contemplating via H.R. 870, is ill-conceived on several grounds, according to a commentary in today’s Roll Call. First and foremost, the bill’s passage would override with retroactive effect the bond indentures of the millions of investors throughout the U.S.

Puerto Rico’s junk-rated power authority got a two-week extension from creditors that will give it more time to sort out its finances, Bloomberg News reported today. The accord allows the Puerto Rico Electric Power Authority (PREPA) to negotiate with bondholders, banks and debt insurers outside of court on ways to revamp its operations and finances. Talks have been going on since August.

Puerto Rico’s publicly owned electric monopoly presented creditors with a restructuring plan, a month before a roughly $400 million payment comes due that analysts say the utility can’t pay, the Wall Street Journal reported today.

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.