Puerto Rico governor rejects key deal with creditors to reduce debt due to pension cuts

Link: https://www.nbcnews.com/news/latino/puerto-rico-governor-rejects-key-deal-creditors-reduce-debt-due-n1258610

Excerpt:

The impasse between the governor and a board that oversees Puerto Rico’s finances threatens to throw into limbo attempts to end a bankruptcy-like process for a government that six years ago declared unpayable its more than $70 billion public debt load.

The deal was reached with creditors who hold general obligation bonds and Public Building Authority bonds sold by Puerto Rico’s government and would resolve $35 billion worth of debt and non-debt claims, according to the board. It also would reduce debt held by those creditors from $18.8 billion to $7.4 billion, a 61 percent reduction, and would provide them with $7.4 billion in bonds and $7 billion in cash, among other things.

The board said the deal would free up more than $300 million a year for government services, and that instead of 30 cents for every dollar in taxes and fees that Puerto Rico’s government collects going to creditors, it would be less than 8 cents.

Author(s): Associated Press

Publication Date: 23 February 2021

Publication Site: NBC News

Puerto Rico Bonds, MBIA Stock Jump on Restructuring Settlement

Link: https://www.wsj.com/articles/puerto-rico-bonds-mbia-stocks-jump-on-restructuring-settlement-11614179542

Excerpt:

A settlement between creditors in Puerto Rico’s bankruptcy case lifted prices of the commonwealth’s municipal bonds and shares of insurance companies that guaranteed payments on the bonds.

Traders have driven up prices of the island’s benchmark $3.5 billion general obligation bond due 2035 by 3.3% to around 78 cents on the dollar after the Tuesday deal removed one of the last logjams in Puerto Rico’s nearly four-year journey through bankruptcy court. Roughly $400 million face amount of the bond changed hands Tuesday and Wednesday, making it one of the most actively traded securities in the municipal-bond market, according to data from Electronic Municipal Market Access.

Shares of the insurers that guaranteed payments on billions of dollars of Puerto Rico’s defaulted bonds also rose as the settlement removed some uncertainty about the amount of claims they would need to pay. MBIA Inc.’s stock has jumped around 13% this week, while Ambac Financial Group Inc.’s shares have gained about 7.2%.

Author(s): Matt Wirz

Publication Date: 24 February 2021

Publication Site: Wall Street Journal

Puerto Rico bond negotiations slog toward seventh year

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202101251023SM______BNDBUYER_00000177-2bc5-dd67-a377-7bede5980001_110.1

Excerpt:

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.

Author: Robert Slavin

Publication Date: 25 January 2021

Publication Site: Fidelity Fixed Income