Puerto Rico Governor-Elect Ricardo Rossell- is traveling to New York to meet with Puerto Rico bondholding groups this week, laying the groundwork to negotiate new terms for the island's debt.
Rossell- will meet separately with Puerto Rico Electric Power Authority and Puerto Rico Sales Tax Financing Corp. (COFINA) senior bond holders on Wednesday, a bondholder representative said. Rossell- had told The Bond Buyer Monday that he would be travelling to New York City Tuesday.
"We're all looking forward to some new blood here," said the bondholder representative, who declined to be identified by name. "We want to move things forward."
His group of holders wants to start the process of negotiating under Title VI of the Puerto Rico Oversight, Management, and Economic Stability Act.
In Title VI bondholder groups can negotiate with the Puerto Rico government to establish modifications of bond terms. Before the modifications can become valid, at least 2/3 of those who vote must approve them and more than 50% of all holders must approve them, based on principal held.
The bondholder representative said that Rossell- had met with holders of Puerto Rico's general obligation debt in the past.
Rossell- comes in New York after a report from the Puerto Rico Planning Board last week underscored the challenge facing his administration. The planning board said the territory's gross national product is believed to have declined by 1.8% in fiscal year 2016, which ended July 1. This was 0.6 percentage point worse than the board's previous estimate of a 1.2% decline.
The board also said that it was reducing its projection of GNP change in the current fiscal year to a 2.3% decline from its previous estimate of a 2% decline.
According to the board, Puerto Rico's GNP contracted by 0.1% in fiscal year 2013, 1.7% in fiscal year 2014, and 0.5% in fiscal year 2015.
