MatlinPatterson Global Advisers is raising money to invest in Puerto Rico, the beleaguered commonwealth that’s attracting debt investors wagering on a rebound, Bloomberg News reported yesterday. The firm, which oversees $7.5 billion, has invested about $150 million in the island. The New York-based firm is raising cash for a standalone strategy for investments in the island, after first making forays into Puerto Rico debt two years ago. MatlinPatterson is expanding its involvement as the island’s financial woes pile up. Poorer than the poorest U.S. state, Mississippi, and with $72 billion in debt, Puerto Rico is drawing the interest of firms including Fir Tree Partners, Knighthead Capital Management, D.E. Shaw & Co. and Canyon Partners, which believe they can profit from helping the commonwealth restructure debt and turn around its economy. Read more.
In related news, Puerto Rico's distressed power authority PREPA will meet in New York on Thursday with its creditors, who have proposed a new debt restructuring plan in response to PREPA's proposal earlier this month, Reuters reported yesterday. The creditors' plan is based on the same capital expenditure and other financial assumptions as PREPA's plan, but would give the debt more favorable treatment. Read more.
