Puerto Rico’s effort to persuade bondholders to forgive a big chunk of its $74 billion of debt has been stalled by a major stumbling block: The government’s murky finances have left neither side entirely certain about how much it can afford to pay, Bloomberg News reported. The most recent annual financial statements are for 2014.
Puerto Rico in Distress
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Post Hurricane Maria, there is no capacity for Puerto Rico to make any debt payments in the coming decade, and the entire debt stock will need to be massively written-down to make the island’s recovery feasible, according to a commentary in the Washington Post. Before the hurricanes hit Puerto Rico, the situation was already dire.
More than two months after Hurricane Maria devastated Puerto Rico, the island’s government still hasn’t received any of the $4.9 billion of short-term loans promised in the storm aid package Congress passed at the end of October, Bloomberg News reported.
A Puerto Rican official yesterday said that the overhaul of the U.S. tax system, if not amended, could devastate the bankrupt U.S. territory’s ability to collect desperately needed revenues, Reuters reported. Francisco Pares, an assistant secretary in Puerto Rico’s treasury department, said a major tax overhaul approved over the weekend by the U.S.