Puerto Rico

Puerto Rico Electric Power Authority's (PREPA; Caa3 negative) anticipated issuance of new securitization bonds would carry risks that are typical of utility cost recovery charge (UCRC) bonds that Moody's Investors Service rates, such as legislative risk, servicing risk, customer payment delay and default risk as well as event risk stemming from severe weather conditions, the agency says in a report which outlines how those risks might present themselves in the specific circumstances of PREPA and Puerto Rico.

Resident Commissioner Pedro Pierluisi, D-P.R. and others testifying at a Senate committee hearing on Puerto Rico on Thursday said that it’s possible that some of territory’s debt may be unconstitutional and, if that is the case, it should not be paid.

The Treasury Department’s Antonio Weiss on Thursday will ask Congress to move swiftly to provide expanded Chapter 9 bankruptcy protection to Puerto Rico, as well as its authorities, and to provide other relief to the territory as it faces dire fiscal and liquidity crises.

The Treasury Department's Antonio Weiss and Puerto Rico Gov. Alejandro Garcia Padilla will testify on Thursday before a Senate Committee on the territory's economy, debt and options that should be considered by Congress.

Puerto Rico's efforts for a consensual debt restructuring suffered a setback Wednesday, as talks between the Government Development Bank for Puerto Rico and a group of investors broke down.

Puerto Rico’s unemployment rate fell to the lowest level in seven years and three months in September.

Gov. Alejandro García Padilla’s proposal for a local Puerto Rico fiscal oversight and economic recovery board came under fire from financial industry analysts, who said a federally appointed board would have more credibility.

Analysts and bankers questioned the feasibility of a proposal to use a debt exchange to restructure Puerto Rico’s bonds that is under discussion by Treasury Department and territory officials.

Treasury Department and Puerto Rico officials are talking about a way to restructure the territory’s debt without bankruptcy or other legislation, according to sources familiar with the idea.

Puerto Rican civic, political, and business leaders from around the country met in Orlando Wednesday to rally for extending Chapter 9 bankruptcy to Puerto Rico public authorities but one speaker at the event urged caution in throwing support behind such a measure.

The Financial Industry Regulatory Authority ordered San Juan-based Santander Securities on Tuesday to pay $6.4 million for supervisory failures related to Puerto Rican municipal bonds.

The board of directors of the Puerto Rico Electric Power Authority has given the green light to possible rate increases, according to reports in the Puerto Rico press.

Resident Commissioner Pedro Pierluisi, D-P.R., has introduced a bill that would authorize the Treasury Department to guarantee future bonds issued by Puerto Rico and its authorities if it finds they have meaningfully improved the management of their finances.

The Puerto Rico Electric Power Authority’s financial performance was worse than expected in July and August.

In the midst of a spate of municipal bankruptcies and a credit crisis in Puerto Rico, a report from Kroll Bond Rating Agency highlighted a divergence among the credit rating services.

The Government Development Bank for Puerto Rico sued a tax collection body to hand over $400 million, some of which is for payments on bonds insured by Assured Guaranty.

Six advocacy groups are urging two key Senate Republicans to keep Congress from providing Puerto Rico with access to Chapter 9 bankruptcy protection.

Retired Detroit bankruptcy Judge Steven Rhodes and three House members will participate in a two-day meeting in Florida later this month to come up with some solutions to address Puerto Rico’s fiscal and health care crises.

The top Democrat on the House Natural Resources Committee is urging the committee chair to hold a hearing to “cast a spotlight” on the “gross inequity” hedge funds holding Puerto Rico debt are imposing on the commonwealth’s citizens.

The decision is a setback for National Public Finance Guarantee’s efforts to cut its losses in the island’s power utility debt restructuring.