Puerto Rico in Distress

ABI Analysis

The U.S. Supreme Court ruled that Puerto Rico cannot adopt its own legislation to restructure its crushing debt burden because of a 1984 federal bankruptcy provision that bars the commonwealth from using chapter 9, The Washington Post reported yesterday.
With Puerto Rico facing a $2 billion debt payment in just over three weeks, lawmakers in the U.S. House of Representatives passed legislation on Thursday to ease the island’s crippling financial crisis, The Associated Press reported yesterday.
Puerto Rico voters sent a signal of displeasure this weekend with the debt rescue package now pending in Congress, but leaders on Capitol Hill are pushing ahead anyway, insisting the bipartisan compromise is the best deal for federal taxpayers and the island territory, The Washington Times reported yesterday.
Puerto Rico should avoid a potentially prolonged legal battle with bondholders by negotiating a reduction to its $70 billion debt, Bloomberg reported yesterday.