Puerto Rico Legislature Approves Fiscal Adjustment Board

Puerto Rico lawmakers approved a bill to establish a local fiscal adjustment board, a key measure in Governor Alejandro Garcia Padilla’s plan to lighten the island’s $70 billion debt burden.

The bill now goes before the governor for approval. Details weren’t immediately available. Lawmakers haven’t acted yet on another bill to authorize a restructuring of the commonwealth’s main electric utility. Tuesday is the final day of the current legislative gathering. Garcia Padilla can call a special session to require lawmakers to continue working on the measure.

Who holds sway over the island’s financial decisions has been a point of contention among Puerto Rico officials, bondholders and federal lawmakers. The Obama administration has advocated a federal control board as part of a proposal to give the island access to bankruptcy. Pedro Pierluisi, Puerto Rico’s nonvoting member of Congress, rejected the idea of a federal board to oversee the territory’s finances, saying in Washington on Tuesday that it would amount to a “dictatorship,” The Hill reported.


The Puerto Rico Electric Power Authority, known as Prepa, is trying to restructure $8.2 billion of debt to reduce its costs and free up cash for plant upgrades. Investors holding about 35 percent of its debt on Nov. 5 agreed to take losses of as much as 15 percent by exchanging their bonds for new securities.

As part of the agreement between Prepa and bondholders, the utility restructuring bill must be approved by the legislature by Nov. 20. The deadline was extended last week by the bondholders to give the utility more time to negotiate with bond insurers who have objected to terms of the agreement.

Senator Jose Nadal Power, chair of Puerto Rico’s Senate finance committee, said earlier Tuesday during an interview on WKAQ radio in San Juan that the Prepa bill would likely be considered in an extraordinary session.

Puerto Rico Legislature Approves Fiscal Adjustment Board

Comments

Post a Comment

Popular posts from this blog

IMF Executive Board Discusses the First Assessment of Eligible Countries under the Multilateral Debt Relief Initiative

On December 21, 2005 the Executive Board of the International Monetary Fund (IMF) established the list of countries that qualify for debt relief from the Fund under the Multilateral Debt Relief Initiative (MDRI). Debt relief delivery, which could start as soon as January 3, 2005, is now conditional on getting the consents of all the contributors to the Subsidy Account of the Poverty Reduction and Growth Facility (PRGF) Trust, whose contributions help finance the Initiative. The MDRI will deliver debt relief from the Fund to qualifying members countries with an annual per capita income at or below US$380, and to countries above the threshold that have reached the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative. The implementation of the MDRI will reduce the external debt burden of a number of the world's poorest countries and will provide additional resources to help them reach the Millennium Development Goals (MDGs). Background The Executive Board appro...
Read more

Oil’s chaotic collapse deepens; stocks drop worldwide

Image
NEW YORK (AP) — Oil prices crumpled even further Tuesday, and U.S. stocks sank to their worst loss in weeks as worries swept markets worldwide about the economic carnage caused by the coronavirus pandemic. The market’s spotlight was again on oil, where prices have plummeted because very few people are flying or driving, and factories have shut amid widespread stay-at-home orders. Global demand is set to drop to levels last seen in the mid 1990s. At the same time, oil producers can’t slow their production fast enough, and all the extra crude means storage tanks are quickly running out of room. The cost for a barrel of U.S. oil to be delivered in June plunged 43% to $11.57. That’s the part of the market that oil traders are focused on and trading most actively. For oil to be delivered next month, which is when storage tanks could top out, the cost of a barrel stood at $10.01. A day earlier, it fell below zero for the first time, meaning traders paid others to take oil off their hand...
Read more

Mapping Extreme Poverty Around the World A new report from the

Image
A new report from the  World Bank  just landed, finding that a record low of 10% of humanity now live in extreme poverty, down from 11% in 2013. But poverty rates aren’t anywhere close to equal between continents or even countries, as our new series of maps clearly demonstrates. The World Bank provides an in-depth explanation for its methodology, which you can find in Appendix A of the full report  here . We focused on the percentage of people in each country living below what the World Bank defines as extreme poverty, or $1.90/day. We’ll let the researchers defend this definition on their own, but there is one caveat to keep in mind. It can be extraordinarily difficult to collect reliable data from so many countries on a regular basis, and in fact we used the latest year in which numbers were available whenever possible. For example, in some of these maps we compare 2011 figures against 2015. In short, our maps provide the clearest possible apples-to-apples compa...
Read more