Correspondent, New York
Megan's Feed
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.

Jun 9, 2015

New Jersey Governor 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.

Jun 5, 2015

Puerto Rico’s PREPA creditor extension deal looking more likely -sources

NEW YORK, June 4 (Reuters) – Debt-ridden Puerto Rican
utility PREPA was looking more likely to be able to reach
agreement on extending a key creditor agreement, sources
familiar with the talks said on Thursday, a move that would give
PREPA breathing room to continue to work on a turnaround plan.

The forbearance agreement protects the utility from default
while a fix is sought. PREPA, with around $9 billion of debt, is
facing a July 1 $400 million payment to bondholders. Credit
agency Moody’s expects the utility to default on that payment.
If the forbearance, which expires Thursday, is not extended,
PREPA could be vulnerable to lawsuits from creditors.

Jun 2, 2015

Puerto Rico utility plan may lead to downgrade -analyst

NEW YORK, June 2 (Reuters) – A turnaround plan by Puerto
Rico utility PREPA suggests restructuring debt in way that
might lead to a downgrade, and discussions with creditors could
center on sharing the costs of a gap of about $1 billion
identified by the utility, analysts said on Tuesday.

PREPA proposed a plan on Monday that requires investment of
at least $2.3 billion and seeks a “restructuring” with creditors
by June 30 to create what the utility called a “sustainable
capital structure.”

Jun 2, 2015

Puerto Rico’s PREPA plan calls for $2.3 bln, met with skepticism

NEW YORK, June 1 (Reuters) – Debt-ridden Puerto Rican
utility PREPA on Monday proposed a turnaround plan requiring at
least $2.3 billion of investment, but it was met with skepticism
by creditors, with a bondholder representative calling parts of
the plan “unworkable”.

PREPA met a Monday deadline to provide creditors with a
turnaround plan, presenting the proposal at the Manhattan
offices of law firm Cleary Gottleib. The utility had been
expected to ask bondholders to take some pain, kicking off what
could be heated negotiations over terms.

May 29, 2015

Puerto Rico’s PREPA to ask creditors to take some pain – sources

NEW YORK (Reuters) – Puerto Rico’s debt-ridden power authority PREPA is expected to ask bondholders to take some pain as part of a turnaround plan it will present to creditors on Monday, kicking off what could be heated negotiations over terms, sources familiar with the situation said.

PREPA and its creditors must reach agreement quickly or risk hurting the Caribbean island’s broader efforts to climb out of a $73 billion debt hole. Not all creditors are in step, with some more willing to compromise by accepting payment deferrals, those sources say.

May 29, 2015

Insight – Puerto Rico’s PREPA to ask creditors to take some pain-sources

NEW YORK (Reuters) – Puerto Rico’s debt-ridden power authority PREPA is expected to ask bondholders to take some pain as part of a turnaround plan it will present to creditors on Monday, kicking off what could be heated negotiations over terms, sources familiar with the situation said.

PREPA and its creditors must reach agreement quickly or risk hurting the Caribbean island’s broader efforts to climb out of a $73 billion (£47.7 billion) debt hole. Not all creditors are in step, with some more willing to compromise by accepting payment deferrals, those sources say.

May 20, 2015

As Illinois runs out of options in budget crisis, tax rises seen in the cards

NEW YORK/CHICAGO (Reuters) – With no easy way to financially engineer or negotiate its way out of a budget and pensions crisis, Illinois is likely to dish out some unpleasant medicine to its residents in the next few years. And investors say that is most likely to come in the form of higher taxes.

Given the Democrats’ control of the state legislature and their opposition to many proposals for spending cuts, municipal bond fund managers see little alternative for Republican Governor Bruce Rauner other than eventually agreeing to hike taxes, such as raising the state’s income tax or broadening its sales tax base.

May 20, 2015

Insight – As Illinois runs out of options in budget crisis, tax rises seen in the cards

NEW YORK/CHICAGO (Reuters) – With no easy way to financially engineer or negotiate its way out of a budget and pensions crisis, Illinois is likely to dish out some unpleasant medicine to its residents in the next few years. And investors say that is most likely to come in the form of higher taxes.

Given the Democrats’ control of the state legislature and their opposition to many proposals for spending cuts, municipal bond fund managers see little alternative for Republican Governor Bruce Rauner other than eventually agreeing to hike taxes, such as raising the state’s income tax or broadening its sales tax base.

May 8, 2015

Illinois’ supreme court overturns state’s 2013 pension reform law

By Megan Davies and Karen Pierog

(Reuters) – Illinois’ supreme court has overturned the
state’s 2013 pension reform law, which reduced pension costs and
increased retirement ages, according to a copy of the decision,
sending the state’s bonds lower.

The state has the worst-funded pension system and the lowest
credit ratings of all 50 states and has contended that pension
costs are making it difficult to fund services such as
healthcare and public safety.