Puerto Rico seen sliding toward bankruptcy as deadline nears

[SirLinksALot]

SOURCE: YAHOO NEWS

URL: https://www.yahoo.com/news/puerto-rico-seen-sliding-toward-bankruptcy-deadline-nears-070022952--sector.html

By Nick Brown


NEW YORK (Reuters) - Bankruptcy for Puerto Rico is looking ever more likely as the clock ticks down toward a May 1 deadline to restructure $70 billion in debt, ramping up uncertainty for anyone betting on returns from the island's widely held U.S. municipal bonds.

When U.S. Congress last year passed the Puerto Rico rescue law dubbed PROMESA, it froze creditor lawsuits against the island so its federally appointed oversight board and creditors could negotiate out of court on the biggest debt restructuring in U.S. municipal history.

The freeze expires on May 1, however, and an extension by Congress is "not going to happen," said a Republican aide to the House Committee on Natural Resources, which is in charge of territory matters.

A round of mediated talks is scheduled to begin on Thursday. But absent an agreement soon, a growing number of analysts say Puerto Rico will seek protection from creditors under PROMESA's court-sanctioned restructuring process, akin to U.S. bankruptcy.

Forbearance deals could let negotiations continue past May 1, but a source directly involved in the talks said avoiding an eventual bankruptcy is "impossible."

The source, who declined to be named because the talks are private, said parties have grown further apart since Governor Ricardo Rossello took office in January.

The negotiating tactics of Rossello and the board have jarred investors who expected more creditor-friendly approaches from both. The board is pushing debt repayment cuts more than double those proposed by former Governor Alejandro Garcia Padilla, a populist whose policies had already alienated creditors.

Disparate stakeholders have united to question the legality of a fiscal turnaround blueprint approved by the board, and to resist mediation efforts.

Hector Negroni, whose Fundamental Credit Opportunities fund holds Puerto Rico debt, said he recalled "constructive comments" from Rossello and board members "about protecting the priorities of creditors" during the board's early days. "But their words are not being followed up by their actions," Negroni said.

Bankruptcy is now "the most likely outcome," said Height Securities analyst Ed Groshans, who increased loss projections for bond insurers like MBIA Inc and Assured Guaranty Ltd in an April 3 note.

(EXCERPT ONLY) CLICK ABOVE LINK FOR THE REST....

[catfish1957]

Time to jettison this island, and let them stand on their own.  I for one am tired  of funding territorial entitlement slugs.

Wean 'em.

[Cripplecreek]

Time to jettison this island, and let them stand on their own.  I for one am tired  of funding territorial entitlement slugs.

Wean 'em.

The feds didn't bail out Detroit and they damn sure shouldn't bail out PR.

[Fishrrman]

Trump a Puerto Rico: caer muerto!

[Frank Cannon]

Sliding towards? They are already there and have been for quite a while. All that has been going on is a bunch of deck chair shuffling.

[Sanguine]

The feds didn't bail out Detroit and they damn sure shouldn't bail out PR.

No, but we taxpayers sure bailed out Flint.

[geronl]

When U.S. Congress last year passed the Puerto Rico rescue law dubbed PROMESA, it froze creditor lawsuits against the island so its federally appointed oversight board and creditors could negotiate out of court on the biggest debt restructuring in U.S. municipal history

That sounds like a lot like Chapter 11 bankruptcy to me

[goatprairie]

Time to jettison this island, and let them stand on their own.  I for one am tired  of funding territorial entitlement slugs.

Wean 'em.

Every time PR has a vote on independence, statehood, or staying a territory, the indys only get about 5% of the vote.  They're split on statehood or remaining a territory.
On some other forum some nitwit from PR made a post where he accused the imperialist U.S. of exploiting the island. I told the dope that most Americans would love to be rid of this drain on our money and resources.  If they want to go indy, 99% of non-PR Americans wouldn't give a good gdamn.