Puerto Rico’s debt-restructuring advisers appear willing to give creditors and lawmakers one of the key conditions demanded as part of any debt restructuring: a degree of federal oversight of the commonwealth’s finances, Bloomberg News reported on Friday. “It’s clear that Congress, to the extent that it’s going to share its bankruptcy power with the commonwealth and allow us to use it to address the complexity of this restructuring, I think everybody’s acknowledged that a control board is an essential feature,” said Jim Millstein, the founder of restructuring adviser Millstein & Co. Millstein, along with attorney Richard Cooper of Cleary Gottlieb Steen & Hamilton LLP and Melba Acosta, the island’s debt chief, updated House and Senate staff members on Friday in Washington, D.C., on the commonwealth’s plan to reduce its debt load to $26.5 billion from $49.2 billion, a 46 percent cut. The House Natural Resources Committee last Tuesday spent about two hours discussing the possibility of putting a U.S. authority in place to help end to the chronic budget strains that have pushed the Caribbean island to default on some of its bonds. The idea has gained backing with Republicans as the House seeks to craft legislation by the end of March to assist the U.S. territory, though the scope of the new federal powers is still being considered. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
