Puerto Rico’s financial oversight officials are backing away from commitments made to bondholders as the economic damage from the coronavirus becomes clearer, WSJ Pro Bankruptcy reported. The board overseeing Puerto Rico’s finances has concluded it won’t have a sufficient surplus to cover bondholders’ settlement payments under its current debt-adjustment proposal. The proposed restructuring, which writes down $35 billion in government bonds by 70 percent, laid out a path to end the U.S. territory’s court-supervised bankruptcy with the backing of major creditors. But the business and travel restrictions put in place to combat the spread of Covid-19 cut into the revenue needed to settle the government’s debts to bondholders and pensioners. The board, which sets Puerto Rico’s repayment terms, is considering trying to renegotiate the proposed settlement and avoid sparking litigation with creditors. A spokesman for the board said it would meet today to approve a new fiscal framework that would lay out how much bondholders could be repaid over the coming years.
