Puerto Rico officials announced Thursday morning that they will present the structure of a proposed comprehensive debt exchange Friday.
Financial and legal advisers to a wide range of holders of Puerto Rico municipal bonds will meet with Puerto Rico representatives in New York City.
"The proposed restructuring will be composed of a comprehensive single transaction to be accomplished through a voluntary exchange offer," the Government Development Bank for Puerto Rico said in a press release. "The GDB and advisers to the commonwealth will explain further details of the proposed structure to the creditors' advisors. No offer will be made at the meeting."
The meeting is private and those who will attend have signed non-disclosure agreements with Puerto Rico agreeing to keep the meeting's contents confidential.
"This meeting with consultants and advisers to many of the island's main creditors is part of our continued effort to maintain a constructive and open dialogue with our key stakeholders," said GDB president Melba Acosta Febo. "The proposed restructuring process is a comprehensive plan that will benefit all parties while supporting the creation of a sustainable path forward for the commonwealth."
The GDB said there are a few key principles that will shape Puerto Rico's restructuring process.
The "transaction will be structured as a voluntary exchange offer, in which creditors across the commonwealth will agree to amended payment terms through a consensual negotiation." The government aims to have a single, comprehensive exchange transaction for a wide range of bond types. Furthermore, the size of debt relief sought will depend on the funding gap identified by the Working Group for Fiscal and Economic Recovery of Puerto Rico.
In early September the Working Group announced that Puerto Rico would have enough money to pay between 12% and 28% of its debt service from fiscal year 2016 to fiscal year 2021.
In Puerto Rico's attempted restructuring the government is also seeking to continue to provide essential services to the commonwealth's residents, make payments on its restructured debt, and respect the Puerto Rico constitution's priorities for the payment of the commonwealth's public debt.
Puerto Rico Gov. Alejandro García Padilla has indicated that he expects his government to be forced to consider steps like a partial government shutdown or debt default in the next few weeks. He has said he will prioritize the payment of services over the payment of Puerto Rico's debts.
