Puerto Rico, which triggered the biggest default in the municipal-bond market by skipping nearly $1 billion of debt payments in July, is set to pay Millstein & Co. as much as $8.4 million in the next year to provide outside restructuring advice, Bloomberg News reported yesterday. The commonwealth extended its contract with Millco Advisors LP, an affiliate of Washington, D.C.-based Millstein, through June 30, 2017, according to a review of the agreement provided by the island’s Office of the Comptroller. The commonwealth’s Fiscal Agency and Financial Advisory Authority is set to pay the firm as much as $8.4 million, according to the contract. Millstein has been advising Puerto Rico since February 2014 on how the commonwealth and its agencies can reduce its $70 billion of debt and has been negotiating on the island’s behalf with creditors. A seven-member federal control board will begin overseeing any restructuring of Puerto Rico’s obligations and help end its reliance on deficit borrowing to fill budget gaps. President Barack Obama in June enacted PROMESA to create the control panel and establish a framework allowing the commonwealth to reduce its debt load. Millstein has a separate $3 million contract with Puerto Rico that runs through December and would compensate the firm if a restructuring deal is finalized.
