Puerto Rico in Distress

ABI Analysis

The Puerto Rico Oversight Board sought on Tuesday to restart suits on $6.4 billion of revenue bonds and to set the central government bankruptcy disclosure hearing for June 16, The Bond Buyer reported. The board also extended a deadline for the bond insurers to withdraw their support of the debt deal.

Puerto Rico, the U.S. territory still in the midst of a four-year-long bankruptcy, is seizing on demand for risky bonds, Bloomberg News reported. The Puerto Rico Aqueduct and Sewer Authority, the island’s main water supplier, is planning to refinance as much as $1.8 billion of debt after the yield penalty it faces in the bond market tumbled.

Two rival bills seeking to resolve Puerto Rico’s status as a U.S. territory will get full hearings in the U.S. House of Representatives’ Natural Resources Committee on April 14, Bloomberg News reported.

A framework that outlines how Puerto Rico will restructure at least $35 billion in public debt and more than $50 billion in public pension liabilities threatens a 10% cut to public pensions if no agreement is reached with retirees, the Associated Press reported. The amended plan of adjustment of 233 pages was filed late Monday in U.S.