Puerto Rico’s fragile economy is facing an uncertain future after the island’s governor rejected a settlement announced late Sunday with bondholders that would reduce the U.S. territory’s public debt by 70 percent, the Associated Press reported.
Puerto Rico in Distress
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Puerto Rico general obligation bonds traded higher yesterday in the wake of a report of a tentative deal involving debt that the U.S. commonwealth’s federally created financial oversight board has been trying to void, Reuters reported.
Competing bondholder groups and the oversight board supervising Puerto Rico’s debt restructuring have reached a tentative compromise that moves the U.S. territory closer to leaving bankruptcy, the Wall Street Journal reported.
The U.S. Court of Appeals for the First Circuit said that Puerto Rico pension bondholders have no collateral rights over money collected by the U.S. territory’s public retirement system after it filed for bankruptcy in 2017, WSJ Pro Bankruptcy reported.
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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.