Investment funds owning about $1.9 billion of Puerto Rico’s general obligation bonds have formed a committee to negotiate a consensual restructuring with the commonwealth and the federal oversight board that manages its finances, the Wall Street Journal reported. Members of the committee are seeking to differentiate themselves from a pre-existing group of general obligation bondholders that includes Aurelius Capital Management LP, which is fighting the board and the island’s government in ongoing litigation. The new group organized in August after the oversight board reached important deals with Puerto Rico’s two other largest classes of debt — bonds issued by its power utility and its sales-tax authority — raising hopes that general obligation creditors might also broker a settlement. The committee includes hedge funds Fir Tree Partners and Mason Capital Management LLC and mutual-fund manager First Pacific Advisors LLC, according to a bankruptcy court filing.
