Puerto Rico in Distress

ABI Analysis

When the federal government set out to regulate mutual funds, investment firms in Puerto Rico were deemed too far off the beaten track to merit scrutiny so the mutual funds were excluded from regulation under the Investment Company Act of 1940, The New York Times reported today.

Puerto Rico's power authority PREPA has reached a deal with its lenders to restructure $700 million in matured debt, a significant step in turning around the utility after it clinched a deal with bondholders earlier in September, Reuters reported yesterday. Finding a solution for PREPA has been seen as a critical test for the U.S.

Puerto Rico’s main electricity provider, PREPA, failed to extend a contract with its bond insurers that has given the power company time to negotiate a way to restructure its $8.3 billion of debt, Bloomberg News reported on Saturday.

The U.S. Treasury Department said yesterday that Congress should provide Puerto Rico with access to a restructuring regime to help the commonwealth deal with its fiscal challenges,  Reuters reported yesterday. "Without federal legislation, a resolution across Puerto Rico's financial liabilities would likely be difficult, protracted and costly," the Treasury Department said in a statement.

Other Resources

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.