Puerto Rico

Leaders and politicians of Puerto Rican descent on Tuesday called on President Obama to help negotiate a fair debt deal with the island’s creditors and explore a Federal Reserve loan.

Puerto Rico wound up with a $703 million deficit in 2015, a fiscal year it had budgeted to be at least superficially balanced, according to Puerto Rico Secretary of the Treasury Juan Zaragoza Gómez.

A source close to the Puerto Rico government, disputing a report that restructuring is avoidable, said specific debt decisions will be delayed until at least least mid-September.

Puerto Rico Electric Power Authority’s proposed partial moratorium on debt payments may foreshadow the commonwealth’s strategy for restructuring the island’s estimated $72 billion of debt.

The Puerto Rico Electric Power Authority has five weeks to bridge remaining differences with its forbearing bondholders over how to deal with its $8.1 billion of bond debt.

The probability of a Puerto Rico default that would cause “substantial” losses “is approaching 100%,” Moody’s Investors Service said.

Municipal bond funds have reported outflows for 11 straight weeks, as investor confidence gave way to concerns over the credit of such issuers such as Puerto Rico and Chicago and the probability of rising interest rates.

The Puerto Rico Electric Power Authority board of directors announced Tuesday it named Javier Quintana Mendez the authority’s new executive director.

The Senate Finance Committee on Tuesday approved a bipartisan, modified, two-year tax extenders bill that includes several provisions relating to bonds and Puerto Rico.

Puerto Rico’s total employment declined by 0.7% in June from May on a seasonally adjusted basis.

Municipal Market Analytics professionals Monday said it was “quite reasonable” to expect that the Puerto Rico Public Finance Corp. will make its debt service payments on Aug. 1.

Standard & Poor's Ratings Services said it has lowered its CCC-minus rating on Puerto Rico Public Finance Corp. (PFC) series 2011A and B and series 2012 A bonds to CC following non-appropriation of debt service by the legislature in the fiscal 2016 budget.

Puerto Rico's longstanding and deepening fiscal challenges led most closed-end municipal bond funds (CEF) to reduce holdings of the debt of the commonwealth, protecting the majority of these funds from substantial negative effects, says Fitch Ratings.

The Senate Finance Committee is pressing Treasury Secretary Jack Lew for positions on Puerto Rico, including whether it supports giving the troubled territory the ability to allow its public entities to file for bankruptcy protection under Chapter 9.

The Puerto Rico Aqueduct and Sewer Authority is "optimistic" it can sell a bond by the end of August, raising money to repay a bank line and make capital improvements.

Puerto Rico's approved budget allocation for appropriation and GDB debt is 19% short of the amount requested by the governor.

The Puerto Rico Electric Power Authority extended its contract with restructuring consulting firm AlixPartners to mid-November.

Sens. Chuck Schumer, D-N.Y., and Richard Blumenthal, D-Conn., unveiled a bill on Wednesday to allow Puerto Rican public entities to declare Chapter 9 bankruptcy.

Nebraska relies on Chapter 9 as a quick and easy way to restructure troubled special taxing district debt.

Puerto Rico’s attempt at a quick and consensual debt restructuring may quickly dissolve into legal chaos, analysts said.