Puerto Rico’s government called for deeper cuts in debt repayment in light of the coronavirus pandemic’s severe economic impact, saying a $35 billion restructuring proposal from financial-oversight officials “is simply not feasible,” WSJ Pro Bankruptcy reported. The U.S. territory said that its financial-oversight board should abandon a proposed restructuring of government bonds and public pensions now that previous assumptions around Puerto Rico’s economic trajectory are no longer viable. The board, which is overseeing Puerto Rico’s public finances, has already put an indefinite pause on the proposed debt-adjustment plan while assessing the economic impact of the pandemic. “As a practical matter, the board’s commitments made to various creditor groups in the proposed plan of adjustment no longer work,” the government said on Sunday in a document outlining the long-term fiscal outlook. A spokesman for the board, which gets the final say on whether debt repayments need to be changed, said it was reviewing the government’s suggestion. The government predicted it could lose at least $1.5 billion in “tax revenue due to a combination of reduced economic activity and delays or postponements of tax payments” in the current fiscal year, which ends June 30. Through the 2022 fiscal year, the total economic impact could reach $5.7 billion, the government said.
