An adviser to Puerto Rico Governor Ricardo Rossello said yesterday that the distressed U.S. territory would not necessarily file for bankruptcy if it failed to reach a debt-restructuring deal with creditors before Monday's negotiating deadline, Reuters reported yesterday.
Puerto Rico in Distress
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Hedge funds first starting buying Puerto Rico debt in the summer of 2013 because they liked what they saw: A government that was paying high, tax-free yields that couldn’t go bankrupt.
Lawyers for Puerto Rico's government are drafting a forbearance agreement that could allow the U.S. territory to avoid invoking bankruptcy protections in the short-term, Reuters reported on Friday. Puerto Rico and its creditors wrapped up roughly a week's worth of mediated talks in New York, aimed at striking a deal to restructure much of the $70 billion in debt the island cannot pay.
The trading prices of Puerto Rico bonds largely account for the losses investors will take when the island restructures its $70 billion debt, said Art Steinmetz, the chairman and chief executive officer of OppenheimerFunds Inc., a major holder of the island’s securities, Bloomberg News reported yesterday.
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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.