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The government of Puerto Rico, which trapped itself into a staggering US$72 billion debt, has presented a long term payout proposal to its creditors. Government officials of the Caribbean island held several meetings with their creditors to negotiate the terms of the agreement, in an attempt to delay their payments for its large bond payments which are due in a few months. Puerto Rico’s government offered to swap its existing bonds for two new types of securities to get ahold of an adequate cash reserve to restore its economic growth and stability. “We believe the proposal we presented is fair, balanced and reflective of the commonwealth’s actual capacity to pay our creditors over the long term,” said the government in a statement. The first class of new bonds proposed by the government will be begin repaying principal after five years, paying investors 5% interest from the initial payment. The second class of new bonds however, will not begin repaying principal for 10 years, and t...

New York lawyers, consultants and publicists stand to rake in more than $100 million in fees as Puerto Rico struggles to stay afloat. The commonwealth’s $72 billion debt crisis has been a boon for well-connected companies like MillCo Advisors, a financial-restructuring firm, which stands to gain as much as $52.4 million. Jim Millstein, who heads MillCo, is a former official of the US Treasury Department. Puerto Rico also has contracts with Manhattan law firms Cleary Gottlieb and Proskauer Rose that max out at $37 million and $6.6 million, respectively, according to government records and contracts reviewed by The Post. Another Manhattan law firm, Kirkland & Ellis, is nickel-and-diming ­Puerto Rico, charging for catering and 16 cents per page for photocopying, according to its contract, which shows it stands to make up to $4.6 million. Despite all the high-powered help, Puerto Rico defaulted on debt payments this month, the second time it has done so, and US Treasury Secretary J...

Facing $70 billion in debt and a 45% poverty rate, Puerto Rico’s leaders are expected to meet with creditors soon in an effort to negotiate a debt restructuring deal. But experts caution that there is no quick fix to getting the island Commonwealth back on solid footing and allowing it to emerge from the crisis on a more sustainable path. The root of the island’s crisis, points out Jose Villamil economist at Estudios Tecnicos, a San Juan consultancy, is that both the population and the economy of Puerto Rico have become smaller, and are projected to continue to contract. The island’s population dropped from 3.8 million in 2000, to 3.64 million in 2012 to 3.548 million in 2014, Villamil says. “By 2030 the population is now estimated to be around 2.8 million, way below … the 2000 projection of close to 4.0 million by 2020.” He adds, “There is not a general awareness of what 10 years of economic contraction means” for the Commonwealth and its population. More than 250,000 jobs have been...

Puerto Rico plans to propose a debt exchange to investors Friday, offering to swap existing bonds for two new types of securities to help the U.S. commonwealth alleviate its debt burden. Swap proposal offers investors two new types of security, both of which would delay payments By Aaron Kuriloff Puerto Rico Plans Debt-Exchange Offer Friday

Morgan Stanley paid a New Jersey widow $95,632 to compensate for her losses on Puerto Rico securities, in what may be the first case of its kind involving mainland investors and commonwealth debt. A Financial Industry Regulatory Authority arbitration panel decided in October that the bank must pay Morrisa Schiffman for compensatory damages. She asked for $157,267.17 for unsuitable recommendations, failure to disclose and negligent supervision, according to the case document. Seth Lipner, a lawyer at Deutsch & Lipner in Garden City, New York, who represented Schiffman, said that he knows of no other case where a mainland investor won compensation for Puerto Rico bond losses. “She’s a widow who was using the income to supplement her retirement,” Lipner said in a telephone interview Thursday. “I do anticipate seeing more people complaining as they come to realize that these bonds are not coming back to par.” Commonwealth securities, which attracted investors because they’re t...

Negotiations to restructure roughly $9 billion of the debt of Puerto Rico ’s power company have resumed after breaking down last week, reviving hopes that a default can be avoided. Creditors who have been trying for a year and a half to work out a restructuring deal with the utility declared their fragile deal dead when a crucial Jan. 22 deadline passed without a vote by the Puerto Rican Legislature to approve the restructuring plan. The creditors blamed Puerto Rico for failing to honor a commitment to enact an enabling law on time. The utility, the Puerto Rico Electric and Power Authority — or Prepa — countered that the creditors had changed some terms at the last minute. But late Wednesday night, both sides announced that they had resumed talks and agreed to wait until Feb. 16 for the Legislature to enact the required statute. In a statement, Stephen Spencer, spokesman for the creditors, known as the Bondholders Group, said they had been encouraged by public statements from Puerto Ri...

Every single Democrat in the Senate, and the two independents who caucus with them, are urging Senate Majority Leader Mitch McConnell to act quickly to help the island of Puerto Rico restructure its debt. The commonwealth -- home to over 3 million U.S. citizens -- is crumbling under $70 billion in debt , which its government says it cannot pay. Puerto Rico is expected to miss its upcoming $469 million payment to bondholders in May, barring any action by Congress. On the other side of the Capitol, House Speaker Paul Ryan (R-Wis.) committed to Minority Leader Nancy Pelosi (D-Calif.) during negotiations over the year-end omnibus spending bill that the House would move on legislation aimed at providing relief to Puerto Rico by March 31. As recently as last week, however, the Senate had yet to decide when or if it would consider legislation. Led by Sen. Maria Cantwell (D-Wash.), ranking member of the Energy and Natural Resources Committee, Senate Democrats wrote to McConn...

Senate Democrats have united to push for Puerto Rico to get bankruptcy protections to help it get out from under its massive debt burden. Every Senate Democrat signed on to a letter released Wednesday, pushing Majority Leader Mitch McConnell (R-Ky.) to act quickly on legislation allowing the island territory to declare bankruptcy. They added that any Puerto Rico relief bill that does not include bankruptcy language would not be a “real solution.” “We urge you to commit to working with us to swiftly enact legislation to give Puerto Rico access to appropriate restructuring tools,” the Democrats wrote. “This is the only way Puerto Rico can respond effectively and responsibly to this growing financial and social catastrophe.” Senate Democratic Leader Harry Reid (Nev.) underlined that demand Wednesday on the Senate floor. He said any bill that does not include bankruptcy legislation would be an “abject failure.” For months, Puerto Rican officials have pushed Congress to allow it to dec...

Puerto Rico has scheduled meetings Friday with representatives of several bondholder groups to discuss a possible restructuring of $70 billion of municipal bonds, people familiar with the matter say. The meetings come as Puerto Rico struggles to make progress on two tracks, striking deals with bondholders and persuading U.S. legislators that the island merits relief from the U.S. government. Further complicating the process, the U.S. territory has more than a dozen types of bonds and is negotiating simultaneously with several creditor groups that have competing claims. Puerto Rico missed about $37 million of debt payments in January, while a tentative agreement expired between bondholders and the Puerto Rico Electric Power Authority. The government raised estimates of its financing gap by 15% last week, which investors expect will increase the losses Puerto Rico will push them to accept in a restructuring. Some investors are skeptical about Puerto Rico's willingn...

Tax incentives aimed at spurring Puerto Rico's economy have created 5,800 jobs in the first four years since their enactment, but could create another 50,000 jobs in their next eight, according to a study commissioned by the island's government. The study, released on Tuesday by the economic consulting firm Estudios Tecnicos and commissioned by Puerto Rico's Department of Economic Development and Commerce, said Acts 20 and 22 have generated about 3,349 and 2,483 jobs, respectively. The study sees a steep increase in the next eight years, estimating a combined total of 56,000 jobs created by 2024. The acts, highly touted when they were passed in early 2012, are aimed at spurring a Puerto Rican economy that is facing a 45 percent poverty rate and rapidly shrinking tax base as residents jump ship for the continental United States. The island is $70 billion in debt and trying to sway creditors on taking pay cuts, while lobbying Washington lawmakers to let...

Jan 26 Tax incentives enacted by Puerto Rico in 2012 to help spur the island's economy have generated an estimated 5,832 jobs, and could create about 56,000 by 2024, according to a study commissioned by the island's department of economic development and commerce. People who have come to the island under Act 22 have spent about $266 million in real estate, and generated $228 million in planned capital investments in the troubled U.S. commonwealth, according to the study by the economic consulting firm Estudios Tecnicos. (Reporting by Nick Brown) Puerto Rico tax incentives created estimated 5,800 jobs - study

Puerto Rico's advisors are expected to meet with creditors on Friday as the island continues to try and negotiate a debt restructuring deal, according to a source familiar with the situation. Facing $70 billion in debt and a 45 percent poverty rate, Puerto Rico is trying to solve an economic crisis before it hits substantial debt payments in May and July. It has defaulted on some of its debt and is trying to persuade creditors to take concessions. Debt restructuring talks, which have slowed in recent weeks, have been expected to pick back up this month. Puerto Rican leaders have said they will propose a universal exchange offer, or a so-called superbond, to many sets of stakeholders. Creditors have also been discussing among themselves possible alternatives, several sources said recently. Melba Acosta, president of the GDB, said earlier this month that the island planned to sit down with creditors soon and put forward a comprehensive restructuring proposal. ...

Tax incentives aimed at spurring Puerto Rico's economy have created 5,800 jobs in the first four years since their enactment, but could create another 50,000 jobs in their next eight, according to a study commissioned by the island's government. The study, released on Tuesday by the economic consulting firm Estudios Tecnicos and commissioned by Puerto Rico's Department of Economic Development and Commerce, said Acts 20 and 22 have generated about 3,349 and 2,483 jobs, respectively. The study sees a steep increase in the next eight years, estimating a combined total of 56,000 jobs created by 2024. The acts, highly touted when they were passed in early 2012, are aimed at spurring a Puerto Rican economy that is facing a 45 percent poverty rate and rapidly shrinking tax base as residents jump ship for the continental United States. The island is $70 billion in debt and trying to sway creditors on taking pay cuts, while lobbying Washington lawmakers to let it file for b...

Ever since the Great Depression, our country has provided a lifeline for insolvent municipalities, local public corporations, and their creditors: a last-resort, court-supervised debt restructuring process. This restructuring authority has proven to be an effective, inclusive and fair process to resolve the challenges that all parties face in a municipal insolvency. Its primary purpose, however, is to allow the municipality to recover from its mistakes and factors beyond its control and keep its first and utmost promise – to provide essential services to its residents and businesses. As we have known since last summer, the Commonwealth of Puerto Rico is on the very brink of breaking that promise. Decades of shortsighted fiscal management, combined with the expiration of key federal programs, have left it with enormous debts that it is unable to pay. The island has slashed services and raised taxes to stave off default, but its leadership has long warned that this path is unsustainable...

As Congress stumbles towards a possible solution to Puerto Rico’s debt crisis, the imposition of a financial control board to guide the island’s budgetary decisions has emerged as a major sticking point. Most Republicans, including three powerful Senate committee chairmen who have jurisdiction over the U.S. territory, insist that a control board be part of any long-term legislative plan to manage Puerto Rico’s $72 billion debt. One of those senators, Judiciary Committee Chairman Chuck Grassley of Iowa, told reporters last week that an outside budgeting authority would be crucial to returning the island to financial solvency. He also said Democratic support for such an entity would be crucial for any proposal to advance in the Senate. “We think there needs to be a financial control board,” he said. “We can’t move until we have some sort of compromise.” Congressional Democrats and Puerto Rican officials, for their part, are not entirely opposed to the imposition of a control board if...

Treasury Secretary Jack Lew has   sent a letter   to the U.S. House of Representatives to update Congress on the Puerto Rican “debt crisis.” Lew is referring to the fact that Puerto Rico has buried itself under a mountain of debt that it’s struggling to repay. Aided by a special tax status, the island’s total   debt doubled in the 1980s and 1990s, and has tripled since 2000 . To the Obama administration, this situation is merely a government-financing problem, one that should be solved by   changing the rules of the game   and increasing government oversight. The administration does not want to admit it, but what’s really in crisis here is the notion that governments can create prosperity by endlessly borrowing and spending. That’s how Puerto Rico got itself into this mess. These kinds of policies are typically referred to as Keynesian, but that’s being a bit unfair to John M. Keynes. Keynes only suggested   deficit spending during   economic downturns...

The president-elect of the Puerto Rico Chamber of Commerce is resigning after being targeted in a crackdown on tax cheats by the commonwealth's cash-strapped Treasury Department. Chamber President Jose E. Vazquez Barquet announced Frank Medina's resignation Saturday. Treasury officials say Medina's Vita Natura vitamin supplements supplier was shuttered Friday until it pays $257,753 in taxes. Calls to Medina's businesses seeking comment rang unanswered on Sunday. El Nuevo Dia newspaper quoted him as telling reporters Friday that he was "sad and embarrassed" by the situation and would pay his debt. The months-long crackdown has focused on businesses that have failed to remit proceeds from an 11.5 percent sales tax charged to clients. Puerto Rico's Treasury Department has intervened with 35 businesses that collectively owe it $23 million. Follow us: @MailOnline on Twitter | DailyMail on Facebook Puerto Rico business leader snared in tax cheat crackdow...

On Friday, Puerto Rico suffered the latest setback in the island's ongoing debt crisis. Talks on restructuring the nearly $9 billion debt of its power company, a government-owned utility, reached an impasse. While the utility, PREPA, said Sunday that it had reached a forbearance agreement with lenders, negotiations on its debt restructuring still have not reached a resolution since the last deal expired Friday night. Power company officials have warned that failure to make payments on that debt could lead to delays in fuel shipments and blackouts across the island, which is home to more than 3 million people. It's just one financial problem of many for the U.S. territory, where government agencies have amassed a debt of $72 billion. "This financial crisis is just an expression of a deeper crisis, which is the collapse of the economic structure," says Rosario Rivera, an economist and professor at the University of Puerto Rico at Cayey. Rivera tells NPR's Michel ...

A plan to restructure nearly $9 billion of Puerto Rico Electric Power Authority debt has expired after the utility and bondholders were unable to reach agreement to extend the pact, a step back in the island’s attempt to reduce its $70 billion debt burden. The contract stipulated that Puerto Rico lawmakers must approve by Friday legislation that would enable Prepa, as the utility’s known, to restructure its debt. Bondholders and Prepa were willing to push that deadline to Feb. 12, according to a statement sent from the investor group after the pact expired. In return for giving lawmakers an additional three weeks, bondholders asked for a change to a bond purchase agreement that’s included in the restructuring plan. Bondholders sought to delay buying those bonds until the island’s energy commission approves a new customer surcharge, according to the bondholder statement. Prepa refused to wait. “Unfortunately, Prepa is choosing not to extend the restructuring support agreement,” the bond...

A second lawsuit over Puerto Rico's debt default will be joined with a similar suit in order to save time and money and avoid inconsistent rulings, a U.S. federal judge said on Thursday. Financial Guaranty Insurance Company, or FGIC, sued Puerto Rico on Tuesday for diverting $164 million in revenue streams meant to pay the island's debt. The lawsuit mirrored one brought earlier this month by two other bond insurers, Assured Guaranty ( AGO.N ) and Ambac Financial ( AMBC.O ), which argues that the so-called clawbacks violate the U.S. Constitution. The cases, both filed in U.S. federal court in Puerto Rico, are the first against Puerto Rico since Governor Alejandro Garcia Padilla called the U.S. territory's $70 billion debt load "unpayable" last June. The governor has said the only way to afford to pay debt backed by Puerto Rico's constitution was to redirect or "claw back" revenues earmarked for debt at other agencies. "Both...

Puerto Rico's default on its debts is causing real hardship for the island's basic healthcare, legal and education services, U.S. Secretary Jacob Lew said during a visit to the island on Wednesday, stressing that the only solution to pulling the U.S. territory out of its worsening economic crisis is congressional action. "In order to assist the 3.5 million Americans who call this island home, Congress must pass legislation for the President to sign into law without delay," Lew said during a press conference. He called on Congress to approve a restructuring mechanism to help the island deal with its $72 billion public debt. He also said some kind of oversight authority that respects Puerto Rico's system of self-government is needed. The territory is running out of cash faster than expected, as many as 3,000 people are fleeing the island every week, and the government says it will be about $16 billion short of covering debt payments over the next five years. ...