Includes “… Under the agreement, owners of $18.8 billion of general obligation (GO) and Public Building Authority (PBA) debt would receive a $7 billion cash payment and $7.4 billion in new bonds, as well as a capped share of the amount of sales tax revenue that exceeds 2020 fiscal plan projections.”
Municipal bond buyers thought Puerto Rico was on the cusp of restructuring its troubled power monopoly on their preferred terms. Now they aren’t so sure, as government leaders harden their stance against hiking electricity rates to pay off billions of dollars in debt.
Puerto Rico’s fiscal crisis is still not close to abating. Its economy has been in recession for 15 years, its population continues to decline, and it is attracting little new investment. In fact, it isn’t entirely clear that its government knows the true extent of its fiscal shortfall.
In the small Puerto Rican village of Corozal Brenda Rodriguez is still waiting for help. She recorded the frightening rise of the river outside her doorstep during Hurricane Maria.
In embracing new strategies, its municipalities are sowing the seeds of change. They need financial and professional support.
There is a multimillion-dollar corruption network behind the Telegram chat between Puerto Rico Gov. Ricardo Rosselló-Nevares and some of his closest collaborators.
The "defendants engaged in a public corruption conspiracy and benefited at the expense of the Puerto Rican public and students," said Neil E. Sanchez, special agent in charge of the U.S. Department of Education's Office of Inspector General's Southern Regional Office.
A lawsuit to invalidate $14 billion of Illinois bonds draws inspiration from the island’s restructuring.
“It might come as a surprise that about 10% of the Chicago Board of Education’s long-term debt is rated investment grade … The investment-grade debt was issued in the form of special-revenue bonds, which are structured to provide bondholders with more security and higher recoveries in case of a bankruptcy. … Now those bonds’ ratings are being reviewed for a potential downgrade, after a recent appellate court decision raised questions about the special status of special-revenue bonds.”
Today, the Puerto Rican government will comply - nearly two years overdue - with the delivery of the audited financial statement for fiscal year 2016.
“The U.S. Court of Appeals for the First Circuit has affirmed a controversial ruling regarding the treatment of municipal revenue debt, leaving investors with lingering questions about the value and significance of a revenue pledge in a municipal bankruptcy. …”
“A U.S. judge on Wednesday denied a request by Puerto Rico’s federally created financial oversight board to extend a looming deadline to file claims, the latest hurdle for its plan to recoup billions of dollars paid to bondholders of potentially invalid debt issued by the island’s government. …”
“The Financial Oversight and Management Board for Puerto Rico announced Tuesday that it filed a petition with the U.S. Supreme Court to review the Feb. 15 decision by the U.S. Court of Appeals for the First Circuit that declared the appointment of the board members unconstitutional.”
“The pension trust covering Catholic school teachers in Puerto Rico can’t file for bankruptcy, a bankruptcy appellate panel for the First Circuit held. … Church may have to seize assets to cover pensions …”
“… The First Circuit held that special revenues pledged to revenue bondholders are only exempt from the automatic stay (preventing creditor enforcement action for payments to bondholders) if the municipality voluntarily pays the special revenues to the bondholders, and that such timely payments are not mandatory in Title III or purportedly a Chapter 9 proceeding. … there is a solution that does not involve further judicial action: a Model State Law …”
Are Yale’s Puerto Rico profits ethical? … So what exactly is the Puerto Rican debt crisis?
“… ‘I think we should identify those municipalities that come out well, like Fajardo, Isabela, and that they teach the others,’ Cruz suggested. ‘That they see the tool, that they communicate with their colleagues who have good fiscal health. Do not meet just to talk about politics, or legislation. Let them learn from one another and take advantage of that knowledge.’ … "
“The U.S. government announced Monday that it will begin to publish economic data on Puerto Rico amid concerns that statistics released by the U.S. territory itself are flawed. … The bureau said Puerto Rico needs a more modern set of statistics that adhere to international economic accounting standards and that could be used to better inform hurricane recovery efforts. … The U.S. government has pledged billions of dollars for such efforts …”
If there's one thing the financial crisis taught taxpayers, it's that a bailout is one of the easiest ways to grow government and increase the corruption of crony capitalism in our system. One such bailout may be brewing in Puerto Rico unless Congress acts soon.
America’s local governments frequently pledge a slice of their revenue to investors to make their bond deals more attractive by adding an extra layer of security.