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Jul 7, 2015

U.S. court upholds ruling against Puerto Rico bankruptcy law, slams exclusion

By Edward Krudy

(Reuters) – A U.S. supreme court affirmed a lower court
decision to strike down Puerto Rican legislation aimed at
granting local municipalities the right to enter bankruptcy, but
said excluding the U.S. territory’s public entities from federal
bankruptcy law was unconstitutional.

Puerto Rico passed the so-called Recovery Act last year to
give certain public corporations, with around $20 billion in
debt, the ability to restructure financially in an orderly
process. Puerto Rico is currently struggling with a total debt
load of around $72 billion, which it says it is unable to pay.

Jun 30, 2015

Puerto Rico to make July 1 general obligation debt payment -source

NEW YORK, June 30 (Reuters) – Puerto Rico will make a July 1
coupon payment of $645.2 million on its general obligation debt,
a person familiar with the matter said on Tuesday.

Puerto Rico’s bonds have sold off sharply this week after
Governor Alejandro Garcia Padilla said over the weekend and
again on Monday that the U.S. territory would seek a moratorium
on its debt, which amounts to around $72 billion.

Jun 30, 2015

Puerto Rico makes final payment on $900 million bank loan: source

NEW YORK (Reuters) – Puerto Rico on Tuesday made its final payment on a $900 million short-term loan that it got from a syndicate of banks last year, according to a source close to the banks.

The source, who asked not to be named because the transaction is private, said the payment had been made to the trustee on Tuesday and was on it way to the banks.

Jun 29, 2015

No easy way for Puerto Rico to overhaul government debt

NEW YORK (Reuters) – To restructure government debt Puerto Rico will need to reach a negotiated settlement with creditors or modify its constitution, a long and complicated undertaking that may not succeed.

A report by former IMF staffers that was commissioned by the government is proposing a sweeping debt restructuring that includes government-backed general obligation bonds protected under the U.S. territory’s constitution.

Jun 24, 2015

Puerto Rico Government Development Bank chairman resigns

NEW YORK (Reuters) – Puerto Rico’s cash-strapped financing
arm, the Government Development Bank (GDB), said on Wednesday
that its chairman, David Chafey, will step down next Tuesday.

Chafey’s resignation came a day after Puerto Rico’s House
passed a law allowing the government to suspend monthly payments
that it makes into a reserve account for its general obligation
debt. The GDB makes those payments as the government’s fiscal

Jun 19, 2015

In South Carolina, shootings reignite debate over Confederate flag

NEW YORK (Reuters) – The shooting of nine black churchgoers in Charleston this week has revived demands that South Carolina stop flying the Confederate flag on the state house grounds, an issue that still divides residents of a state haunted by its legacy of slavery.

The flag of the Confederacy, a blue saltier emblazoned with white stars on a red background, has fluttered near the state legislature since the early 1960s when it was put up during the peak of the civil rights movement.

Jun 12, 2015

Connecticut governor proposes scrapping business taxes

NEW YORK (Reuters) – Connecticut Governor Dannel Malloy on Friday proposed cutting planned business taxes by $223.7 million over two years after several large corporations threatened to leave the state.

Connecticut’s state legislature passed a $40 billion biannual budget last week that hiked taxes by $1.2 billion over the next two years, prompting a backlash from businesses including General Electric Co, Travelers Companies Inc and Aetna Inc.

Jun 4, 2015

Connecticut raises taxes over corporations’ protests

NEW YORK (Reuters) – Connecticut lawmakers passed a $40 billion biannual budget late on Wednesday, raising taxes by $1.2 billion over two years, despite protests from some of the state’s biggest corporations.

General Electric Co, Aetna Inc and Travelers Cos Inc as well as the state’s Republicans slammed the tax hikes. GE and Aetna, which both have corporate headquarters in the state, said they would consider leaving Connecticut.

May 15, 2015

Puerto Rico bonds rally in high volume after tax agreement

NEW YORK, May 15 (Reuters) – Puerto Rico bonds rallied in
high volume, pushing yields lower on Friday after local
lawmakers agreed to a series of tax measures late on Thursday
night that could help stabilize the island’s finances and pave
the way to a much needed financing deal.

Yields fell on the island’s general obligation bonds (GOs)
as well as on bonds backed by sales tax revenues after lawmakers
said they would increase the sales tax to 11.5 percent from the
current 7 percent as the core of a package of tax measures.

May 13, 2015

Investors play ‘cat and mouse’ with Chicago bonds after downgrade

NEW YORK, May 13 (Reuters) – A downgrade of Chicago’s debt
rating to junk created confusion in the $3.7 trillion U.S.
municipal bond market on Wednesday, with prices sliding in a
volatile session and predictions that they still have further to

While Moody’s Investors Service downgraded the city’s $8.1
billion of general obligation debt to junk at Ba1, other big
Wall Street credit rating agencies have a rosier view of the
Windy City.

    • 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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