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Feb 24, 2015

Puerto Rico residents sue power authority, allege fraud

NEW YORK, Feb 24 (Reuters) – Local residents and businesses
sued Puerto Rico’s Electric Power Authority (PREPA) in federal
court on Tuesday, alleging fraud in the fuel oil procurement
process that plaintiffs said resulted in island residents being
overcharged by more than $1 billion.

The lawsuit in U.S. District Court in Puerto Rico accuses
PREPA, one of the largest U.S. public utilities, of taking
kickbacks to accept millions of barrels of fuel oil from
suppliers that did not meet contract requirements or federal
environmental standards.

Feb 19, 2015

Connecticut governor proposes $753 million in budget cuts

NEW YORK, Feb 18 (Reuters) – Connecticut’s governor
announced a budget on Wednesday that slashes state spending by
$753 million over the next two years, delays scheduled tax cuts
and closes tax loopholes for corporations.

The budget proposal highlights the continued struggles
Connecticut faces after five years of disappointing economic
recovery. The state’s performance has been among the worst in
the nation with slow revenues and high fixed costs putting a
strain of the state’s coffers.

Feb 11, 2015

Puerto Rico may delay bond deal of at least $2 bln to early Q2 -GDB

NEW YORK, Feb 11 (Reuters) – Puerto Rico may push back a
planned bond sale of at least $2 billion until early in the
second quarter as lawmakers amend legislation governing the
deal, president of the U.S. commonwealth’s Government
Development Bank said on Wednesday.

One amendment that removes an interest rate cap for
investors was passed on Tuesday, and lawmakers are considering
another amendment to link the oil tax backing the bonds to
inflation. The amendments are needed to make the sale, which had
been expected to be completed in March, more attractive to hedge
fund investors.

Feb 9, 2015

Puerto Rico to appeal restructuring law ruling

SAN JUAN/NEW YORK, Feb 9 (Reuters) – Puerto Rico said on
Monday it would appeal a U.S. ruling that voided the island’s
restructuring law, saying it left the U.S. commonwealth in legal
limbo and struggling to find a way to manage its debt load.

Late on Friday, a federal judge ruled that Puerto Rico’s
so-called Recovery Act, which made some of its agencies eligible
for court-supervised debt restructuring, violated the U.S.
constitution by allowing a state government to modify municipal
debt.

Feb 9, 2015

Puerto Rico GO bonds fall, PREPA rallies after court ruling

NEW YORK, Feb 9 (Reuters) – Puerto Rico’s benchmark general
obligation bonds hit a record low in early trading on Monday,
while the island’s power authority bonds rallied after a federal
court struck down a law enabling the commonwealth’s public
corporations to default.

The ruling late on Friday by a U.S. District Court dealt a
blow to Puerto Rico’s efforts to ring-fence the government from
debt of around $20 billion in several large public corporations
covered under the so-called Recovery Act.

Feb 7, 2015

U.S. federal judge strikes down Puerto Rico’s restructuring law

NEW YORK, Feb 6 (Reuters) – A U.S. federal judge voided a
controversial law that allows some of Puerto Rico’s public
corporations to default on their debt, saying in a ruling late
on Friday that the U.S. commonwealth’s so-called Recovery Act
contravenes federal bankruptcy law.

The decision in the U.S. District Court has implications for
around $20 billion of debt potentially affected under the act.
That includes $9 billion of debt outstanding at the Puerto Rico
Electric Power Authority (PREPA), which is currently in
restructuring talks with bondholders.

Jan 28, 2015

New York speaker absence slowing state budget process

NEW YORK, Jan 28 (Reuters) – The loss of New York Assembly
leader Sheldon Silver from budget negotiations, after he was
charged with corruption last week, could delay the state’s
budget process and threaten recent strides toward better fiscal
management.

Silver has presided over the state’s budget negotiations for
two decades as speaker and is widely seen as having clout,
influence and experience that will be hard to replace.

Dec 23, 2014

U.S. states’ tax revenue returns to growth in Q3 -Census

By Edward Krudy

(Reuters) – U.S. state tax revenues returned to growth in
the third quarter as income tax collections expanded following a
decline in the previous quarter, U.S. Census data released on
Tuesday showed.

Total state tax revenue rose 4.5 percent to $204.8 billion,
up from $196 billion in the same quarter the previous year,
according to the Census Bureau’s quarterly report on state and
local government tax revenues.

Dec 16, 2014

Puerto Rico to seek extension to bondholder agreement -sources

NEW YORK/SAN JUAN, Puerto Rico Dec 15 (Reuters) – Puerto
Rico’s electric power authority, PREPA, is expected to ask
bondholders to extend a forbearance agreement to give it more
time to turn around its struggling operations, according to two
people familiar with negotiations.

PREPA met with bondholders in New York on Monday but did not
deliver a comprehensive 5-year business plan as expected.
Instead it outlined the current challenges facing the utility,
the sources said. PREPA was required to present the plan as part
of the forbearance agreement it signed earlier this year.

Dec 15, 2014

Puerto Rico to present power-authority overhaul ideas to creditors

NEW YORK/SAN JUAN, Puerto Rico (Reuters) – Restructuring experts will present different scenarios to overhaul Puerto Rico’s troubled electric power authority (PREPA) to creditors on Monday, but will stop short of recommending job cuts, the president of PREPA’s board said in a statement.

The proposals, which will not be made public, were prepared by Chief Restructuring Officer Lisa Donahue of Alix Partners as part of an agreement with creditors.

    • About Edward

      "Ed Krudy leads a team covering the U.S. equity market from New York, where he has been since 2009. Prior to that he set up Thomson's new bureau in Budapest, where he initiated coverage of economic, political, market and company news."
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