Puerto Rico GDB Gets Court Bless­ing for Re­struc­tur­ing

The Bond Buyer - - Market News - — Bloomberg News

The fed­eral judge over­see­ing Puerto Rico’s record bank­ruptcy ap­proved a plan to re­struc­ture debt of the for­mer Gov­ern­ment De­vel­op­ment Bank, the first court au­tho­riza­tion for a work­out of a com­mon­wealth debtor since the is­land be­gan de­fault­ing on its obli­ga­tions in 2015.

U.S. District Court Judge Laura Tay­lor Swain Tues­day blessed the plan to write down about $4 bil­lion of GDB debt af­ter bond­hold­ers au­tho­rized the deal in Septem­ber, ac­cord­ing to Puerto Rico’s over­sight board. While the bank never filed for bank­ruptcy, as the com­mon­wealth did last year, it sought a debt re­struc­tur­ing through a process called Ti­tle VI un­der the fed­eral law that al­lows Puerto Rico to cut its obli­ga­tions.

“The Court’s ap­proval rep­re­sents a ma­jor mile­stone in the re­struc­tur­ing of Puerto Rico’s debt obli­ga­tions,” said Na­talie Jaresko, the board’s ex­ec­u­tive direc­tor. “We con­grat­u­late the gov­ern­ment of Puerto Rico for their ef­fort and look for­ward to our con­tin­ued ef­forts to achieve other con­sen­sual deals,” she added.

It’s the first time Swain has ap­proved a debt re­struc­tur­ing for a com­mon­wealth en­tity. Puerto Rico is seek­ing to re­duce most of its $74 bil­lion of debt. The fed­eral board has filed doc­u­ments to the court seek­ing a write down of the is­land’s sales-tax bonds. Of­fi­cials are also work­ing on re­struc­tur­ing Puerto Rico’s gen­eral obli­ga­tions and debt sold by its main elec­tric util­ity.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.