Puerto Rico is trying to revive a law allowing its public agencies and utilities to restructure their mounting debt as Detroit and other U.S. cities have done, Bloomberg News reported yesterday. Creditors won the first fight in the case by persuading a federal judge in San Juan to throw out bankruptcy protections similar to those allotted municipal entities in the 50 U.S. states.
Puerto Rico in Distress
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Puerto Rico’s House of Representatives rejected a tax-overhaul bill that would have paved the way for a $2.9 billion debt sale needed to avert a cash crunch, pushing prices on the commonwealth’s newest bonds to a record low, Bloomberg News reported on Friday. The chamber voted against the measure 28 to 22 on Thursday, said Ileana Baez Bravo, a spokeswoman for Governor Alejandro Garcia Padilla.
Puerto Rico's electric power authority, PREPA, struggling with $9 billion of debt, won agreement from creditors to extend a forbearance agreement by 35 days, according to statements by a key bondholder faction and PREPA, Reuters reported yesterday.
Investors in the debt of Puerto Rico’s power utility have offered a 30-day extension of a creditor agreement that expires today, Bloomberg News reported today. The Puerto Rico Electric Power Authority (PREPA) has $8.6 billion of securities. Under the bondholder offer, the electricity provider would give creditors a restructuring plan by June 1.