Puerto Rico sales-tax-backed bonds rallied after a tentative agreement struck in the island’s bankruptcy promised to steer a large share of that revenue to owners of the securities, leaving them facing smaller losses than investors previously anticipated, Bloomberg News reported.
Puerto Rico in Distress
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Representatives for holders of Puerto Rico’s general obligation (GO) bonds and “COFINA” bonds, whose debt is backed by sales tax revenue, reached an in-principle agreement to settle a long-running dispute, according to a court filing yesterday, Reuters reported.
The closing of 167 public schools in Puerto Rico a year ago seemed drastic, a painful casualty of a deep and prolonged debt crisis. Then came Hurricane Maria, and now Puerto Rico plans to shutter another 265 schools, an even harsher measure following a calamitous natural disaster that exacerbated the island’s financial woes, the New York Times reported.
ABI Executive Director Sam Gerdano talks with Prof. Andrew Wolfe of American University's School of International Service about Puerto Rico's latest fiscal developments. Wolfe is currently an advisor to the government of Puerto Rico since retiring in June 2014 from the International Monetary Fund after 27 years, where he was a senior manager of the Western Hemisphere Department.
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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.