Even if Puerto Rico’s 3.4 million residents keep tightening their belts, and even if the creditors who lent it $74 billion agree to less than full repayment, the island will still “need the assistance of the federal government to bring this economic and humanitarian crisis to an end,” said Gov. Alejandro García Padilla, addressing the panel that the Obama administration set up to handle the territory’s staggering debt, the New York Times reported today. He urged the board’s seven members to join him “in one voice before Congress” to seek help. Most of Friday’s meeting was devoted to the governor’s delivery of his fiscal plan and questions from the board. Next, the board will review the plan and decide whether amendments are needed. Read more.
In related news, Puerto Rico gubernatorial candidate Ricardo Rossello wants to pay investors interest on their bonds if they’re willing to suspend principal payments, Bloomberg News reported on Friday. The pro-statehood candidate has been meeting with bondholders and believes there is an opportunity to renegotiate a portion of the commonwealth’s $70 billion of debt. That would give the island some breathing room as it seeks to repair its finances and turn around an economy that’s shrunk in the past decade. “We feel that there is an environment for us to have principal payment deferred with paying interest going forward,” Rossello said on Thursday to bondholders and creditors via teleconference at an Association of Financial Guaranty Insurers conference in Manhattan. Read more.
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
