Restructuring Puerto Rico’s finances has involved complex disputes among bondholders invested in different types of Puerto Rico’s public debt. This section outlines the structure of the island’s public debts. Since Puerto Rico lost access to credit markets in late 2014, its current debt structure has been largely unchanged, aside from the runoff of short-term notes, the 2018 wind-down of the GDB, and the 2019 restructuring of sales-tax-backed COFINA bonds (COFINA—an acronym for the Corporación del Fondo de Interés Apremiante—is also known as the Puerto Rico Sales Tax Financing Corporation). Figure 2 and Table A-1 show debt levels as of the end of July 2016.
The Puerto Rico Oversight Board voted to overrule the territory’s House of Representatives on spending for the privatization of the Puerto Rico Electric Power Authority transmission and distribution system.
On Wednesday the House voted 43 to 0 with 2 abstentions against authorizing a revision to this year?s General Fund budget allocating $750 million for the privatization.
On Thursday the board said it had used its budgetary powers in the Puerto Rico, Oversight, Management, and Economic Stability Act to overrule the House vote. On Saturday the board had sent a letter to the leadership of the Puerto Rico House of Representatives and Senate asking them to approve the funding and saying that if it did not the board would act without their approval.
The board said the monetary allocation was ?to ensure the necessary levels of working capital to operate PREPA?s electrical grid and comply with the agreement between LUMA Energy, PREPA and the P3 Authority, by which LUMA is to assume the operation and management of PREPA?s transmission and distribution system on June 1.?
Negotiations on Puerto Rico?s central government and electric power authority debts have extended for several years, leaving participants with clashing views of the length of time they have taken and the lack of resolution of the island’s debts.
A Feb. 10 deadline looms for the Oversight Board to at least submit a bond deal resolution proposal and several participants expect progress in the coming year.
Since the signing of PROMESA, the Puerto Rico Oversight, Management, and Economic Stability Act, Puerto Rico has been hit or at least shaken by Hurricane Maria, political protests forcing the exit of Ricardo Rossell?, earthquakes, and the COVID-19 pandemic.