In the midst of Congress trying to figure out how to best deal with Puerto Rico’s fiscal woes, the commonwealth unveiled a revised proposal Monday to restructure its $70 billion in debt.
The island’s plan would allow general obligation bondholders to recoup 74 percent and Puerto Rico Urgent Interest Fund Corporation, which issues government bonds, bondholders to recover around 57 percent of their debt, Reuters reports.
The territory also upped the annual debt payments it said it’s capable of making from $1.7 billion to $1.85 billion.
Officials told The Associated Press they project the deal would cut its obligation by $12 billion to $16 billion if it goes through.
The Government Development Bank for Puerto Rico said bondholders living in the territory would be “offered the option to receive an amount of Base Bond equal to the current par value of their holdings (i.e., no discount), such Base Bonds to have a long-dated maturity (maturing after the CAB is fully repaid) and an interest rate that is fixed at 2 percent per year.”
“The commonwealth is in crisis, and the fact is that we will only be able to address these issues by working together,” Victor A. Suarez, Puerto Rico’s secretary of state, told The New York Times. “Our commitment to this is underscored by our willingness to listen to our different creditors and work to meet their needs.”
Congress has been weighing whether it should extend the island bankruptcy rights – a move pushed for by Democrats and slammed by conservatives for not getting to the root of the issue.
The House Committee on Natural Resources will hold a markup on draft legislation released in March, which would create an oversight board and allow Puerto Rico to restructure its debt, Wednesday.
The committee’s call for additional oversight received pushback from Democrats and the island’s politicians claiming it was overly invasive.
“The sweeping powers of the oversight board proposed in Republicans’ current discussion draft are far from what Democrats can support,” House Minority Leader [crscore]Nancy Pelosi[/crscore] said in a statement upon its release, adding she applauds the committee’s efforts to try and find a bipartisan compromise on the bill. “In its current form, this board would exert undue and undemocratic control over Puerto Rico’s government and residents.”
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