Puerto Rico’s effort to persuade bondholders to forgive a big chunk of its $74 billion of debt has been stalled by a major stumbling block: The government’s murky finances have left neither side entirely certain about how much it can afford to pay, Bloomberg News reported. The most recent annual financial statements are for 2014. Computer systems spanning dozens of departments don’t talk to each other. Independent agencies either can’t, or won’t, provide details about how they use taxpayer funds. Even the island’s fiscal recovery plan sets aside an extra $600 million a year to cover expenses that the government might not know about. At a court hearing this month, bondholders complained that Puerto Rico was withholding key information during negotiations and urged a federal judge to force the U.S. territory to turn it over. A federal judge yesterday sided with general-obligation bondholders, including Aurelius Capital Management LP and Monarch Alternative Capital LP, which have complained for months that the government and a federal oversight board have not given them enough access to basic spending information. The board and the government had argued that they don’t have some of the information being demanded and that other data was being withheld because commonwealth officials say creditors don’t have a right to it.
For updated news and analysis of Puerto Rico's debt crisis, along with current docket filings in Puerto Rico's case, be sure to visit ABI's "Puerto Rico in Distress" webpage.
