Correspondent, New York
Megan's Feed
Jul 3, 2015

Puerto Rico signals Chapter 9 push with ex-Detroit judge on board

NEW YORK (Reuters) – When Puerto Rico hired former Detroit judge Steven Rhodes it sent a signal to creditors that one possible solution it sees is the one thing it cannot do now: declare bankruptcy.

Gaining access to the U.S. Chapter 9 bankruptcy laws for the commonwealth would give a framework for creditors and debtors of public corporations to work out their differences. Allowing the Commonwealth itself to follow the same path as the city of Detroit, which emerged from bankruptcy last year, would be a further step.

Jul 3, 2015

Insight – Puerto Rico signals Chapter 9 push with ex-Detroit judge on board

NEW YORK (Reuters) – When Puerto Rico hired former Detroit judge Steven Rhodes it sent a signal to creditors that one possible solution it sees is the one thing it cannot do now: declare bankruptcy.

Gaining access to the U.S. Chapter 9 bankruptcy laws for the commonwealth would give a framework for creditors and debtors of public corporations to work out their differences. Allowing the Commonwealth itself to follow the same path as the city of Detroit, which emerged from bankruptcy last year, would be a further step.

Jul 1, 2015

Puerto Rico’s PREPA avoids default, makes $415 mln payment

By Megan Davies

(Reuters) – Puerto Rico’s distressed power authority, PREPA,
avoided default on Wednesday by making a $415 million bond
payment, but creditors cautioned if restructuring negotiations
with the utility over its $9 billion debt deteriorate it would
take legal action.

The restructuring talks are seen as a gauge of whether the
U.S. commonwealth can fix other broken public entities as it
tries to climb out of a $73 billion debt hole. Puerto Rico’s
governor, Alejandro Garcia Padilla, said on Monday he wanted to
restructure the debt and postpone bond payments to solve the
island’s fiscal crisis.

Jun 30, 2015

Puerto Rico’s PREPA, creditors close to deal to avert default-sources

NEW YORK (Reuters) – Puerto Rico’s distressed power utility
PREPA is close to a deal with its creditors to avoid a possible
default on a bond payment of around $400 million due July 1,
sources familiar with the talks said on Tuesday.

PREPA’s payment would likely be partly financed by the
insurers who back the bonds, the sources said. Credit ratings
agency Moody’s Investors Service has said it expects the utility
to default on that payment.

Jun 30, 2015

Major Puerto Rico investor warns it stands ready to defend bonds

NEW YORK (Reuters) – U.S. fund manager OppenheimerFunds, the largest holder of Puerto Rico debt among U.S. municipal bond funds, warned the island it stands ready to defend the terms of bonds it holds, a day after the governor said he wanted to restructure debt and postpone bond payments.

Puerto Rico’s Governor Alejandro Garcia Padilla could be heading toward a fight with creditors unwilling to take reduced payouts as he tries to restructure the island’s $73 billion debt to relieve its fiscal problems.

Jun 26, 2015

Puerto Rico’s PREPA, creditors discussing way to avoid default -source

NEW YORK (Reuters) – Puerto Rico’s distressed power
authority PREPA and its creditors have been discussing a deal
for the utility to avoid a potential default next week as a $400
million payment deadline looms, a source familiar with the talks
said on Friday.

Talks are at crunch point, with PREPA facing a July 1
interest payment. Credit ratings agency Moody’s has said it
expects the utility to default on that payment.

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
agent.

Jun 23, 2015

Puerto Rico’s PREPA, creditors to meet Thursday -sources

NEW YORK, June 23 (Reuters) – Puerto Rico’s distressed power
authority, PREPA, will meet in New York on Thursday with its
creditors, which have offered a new debt restructuring plan in
response to a PREPA proposal earlier this month, three people
familiar with the talks told Reuters.

The creditors’ plan is based on the same capital expenditure
and other financial assumptions that are in PREPA’s plan, but it
would give the debt more favorable treatment, said the people,
who declined to be named because talks are private. The new
proposal offers more relief to PREPA than the original plan,
said one source.

Jun 9, 2015

Rhode Island state judge approves pension settlement

By Megan Davies and Svea Herbst-Bayliss

(Reuters) – A Rhode Island state judge on Tuesday approved a
settlement that would end litigation over a sweeping 2011 public
pension overhaul that garnered national attention.

The settlement was not the “perfect solution,” but was
“fair, reasonable and adequate,” wrote Superior Court Judge
Sarah Taft-Carter in a decision.

Jun 9, 2015

N.J. Gov. Christie wins court victory over pension cuts

NEW YORK (Reuters) – New Jersey’s highest court on Tuesday
ruled that Gov. Chris Christie can cut $1.6 billion from state
pension funding, removing a hurdle for the Republican
presidential hopeful’s national ambitions and giving some
temporary financial relief to the state.

The stakes were high for Christie, who has trailed in polls
behind rivals such as Wisconsin Governor Scott Walker, a fellow
Republican. Christie came under fire for his handling of the
state’s sluggish recovery as well as a scandal around the 2013
George Washington Bridge closure, which saw a former ally plead
guilty to federal charges.