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.