Puerto Rico’s Government Development Bank, whose regulator says faces a cash shortfall of as much as $1.3 billion in June, will continue to operate on its own — for now, Bloomberg News reported yesterday. The bank, which lends to the commonwealth and its municipalities, is insolvent, Puerto Rico’s Commission of Financial Institutions, the bank’s regulator, concluded in its most recent report on the GDB’s finances. That determination allows the island’s Treasury Secretary to ask a court to appoint a receiver to oversee the GDB. It’s a move the administration won’t make at this time, Jesus Manuel Ortiz, a spokesman for Governor Alejandro Garcia Padilla, told reporters yesterday in San Juan. “We are constantly monitoring the liquidity of the GDB and no receiver will be named in the short term,” Ortiz said. Read more.
The House Natural Resources Committee has released draft legislation — with the acroynym PROMESA — in response to Puerto Rico's financial crisis and Speaker Ryan's call for action. ABI Resident Scholar Prof. Melissa Jacoby details PROMESA's restructuring provisions for Puerto Rico in a CreditSlips blog post.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
