Puerto Rico ended its nearly five-year bankruptcy as the commonwealth restructured $22 billion of debt, a crucial step that aims to help the island’s economy and repair its finances, Bloomberg reported. The U.S. territory cut the debt down to about $7 billion Tuesday through a bond exchange where investors hand in their securities for new general obligations. The transaction effectively ends Puerto Rico’s bankruptcy and resolves a major chunk of the $74 billion of debt that the island and its agencies had racked up when the bankruptcy began in May 2017. “Today, the Puerto Rico government formally moves on from fiscal instability and insolvency into a future of opportunity and growth, making today a truly historic day,” David Skeel, chairman of the commonwealth’s federally appointed financial oversight board, said in a statement. A smaller debt burden allows Puerto Rico to work on improving its economy as billions of dollars in federal disaster funds, pandemic aid and hurricane insurance reimbursements flow into the island. Officials are focused on boosting tourism and increasing manufacturing. In a brief address on Monday, Governor Pedro Pierluisi said the debt plan “wasn’t perfect,” but it paved the way for stability and economic development for the island’s roughly 3.3. million residents.
