Puerto Rico’s non-voting representative in the U.S. Congress is exploring changes to federal law that would allow the commonwealth’s municipal agencies to file for bankruptcy to restructure their debts, Bloomberg News reported yesterday. Pedro Pierluisi, whose formal title is resident commissioner, will ask congressional leaders about introducing a bill that would alter the U.S.
Puerto Rico in Distress
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The Puerto Rico Electric Power Authority said Monday that it reached agreements with banks allowing it to defer certain payments until the end of the month, giving breathing space to the cash-strapped utility, the Wall Street Journal reported today. The power authority said that it "may delay certain payments currently due until July 31, 2014," according to a news release yesterday.
Creditors to Puerto Rico's electricity provider were given a slight respite yesterday when the bonds' trustee made a scheduled payment, but the U.S. municipal bond market remained worried the Puerto Rico Electric Power Authority will soon use a new bankruptcy-like process to restructure its debts, Reuters reported yesterday.
Moody's Investors Service said yesterday that Puerto Rico's new debt restructuring law will increase the default risk for public corporations, Reuters reported yesterday.