Puerto Rico and 18 of its authorities, agencies, utilities, and government banks have debt of $72 billion. More than $422 million of that is for bonds issued by Puerto Rico’s Government Development Bank, which is struggling as funds dwindle.
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Ryan (R-Wis.) was planning on introducing a bill this week, but now the hope is to introduce legislation before July 1, when the commonwealth faces a deadline on $2 billion in general obligation bond debt.
A portion of Puerto Rico’s debt is held by hedge funds known as “vultures”, due to their ruthless pursuit of profit from impoverished debtor governments.
Height Securities analyst Daniel Hanson, who follows Puerto Rico closely, said on Friday he remains bullish for a deal with other creditors by Monday.
“The biggest concern is: We want to have them see it while they are here”, Bishop said.
Meanwhile a group called the Center for Individual Freedom is running ads pressuring lawmakers to reject the Puerto Rico bill.
The federation and many Democrats are pushing to allow Puerto Rico to restructure all of its debt.
The financial collapse has led to an unprecedented flight of islanders to the US mainland, mostly to Florida and NY, but also to Connecticut, said Ingrid Alvarez, Connecticut state director of the Hispanic Federation.
Republicans in Congress are considering legislation to relieve Puerto Rico of some of its crushing debt, ahead of a possible default by the island territory. “They are USA citizens; where else are they going to go?” There is one immediate way that Congress could help, Tomic said, which is re-instating Chapter 9 bankruptcy protection afforded to mainland municipalities.
“Over the previous year they’ve done a lot of juggling and they’ve kept the balls in the air, but without revenue growth, without economic growth, you can’t do that forever”, Miller said.
While the senator said he welcomes new islanders to CT, he’s dismayed that the rapid depopulation of Puerto Rico strips it of needed workers and batters the economy. There are optimistic projections that exempting Puerto Rico from the Jones Act would generate billions of dollars in savings that could be used to solve the debt crisis.
While the missed payment will make for embarrassing headlines and certainly bruise the egos of Puerto Rico’s 3.5 million residents, the technical default might not have any real ramifications for a while.
Puerto Rico also suffers from the effects of the Jones Act, an early 20th-century law that bars foreign-flagged ships from traveling from one US port to another.
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There are many reasons why Puerto Rico has racked up so many IOUs.
