Puerto Rico

House fails to approve budget amendment allowing payment to bondholders.

The board said a stay would inflict serious harm on Puerto Rico by plunging it into “financial chaos,” send the bankruptcy process “back to square one,” and would “needlessly delay the commonwealth’s economic recovery.”

The unrest potentially has short- and long-term impacts on the local government and its finances, analysts say.

Judge Laura Taylor Swain's action allows LUMA Energy to continue to operate.

Attorneys say the first step is to get a court to stay enactment of the Plan of Adjustment, but that it is unlikely.

Jaresko's resignation comes the same week as more than 40 Puerto Rican groups called for the disbandment of the Oversight Board in a letter to President Joe Biden.

The teachers' groups will request a stay of plan implementation.

Local legislators may be opposed to the current PREPA bond deal.

More federal Medicaid funding and higher-than-expected economic growth will lead to more revenues, the board expects.

Swain's order affects $1.9 billion of PRIFA bonds and $384 million of CCDA bonds, for which insurers and bondholders will receive minimum recoveries of 14% and 29% of par, respectively.

The law concerning bankruptcy advisor disclosures comes after the SEC fined Oversight Board advisor McKinsey in November.

Participants note there is a long road to sustainable recovery for the island that is dependent on the local government keeping its spending in check.

After more than four years of intense negotiations between many stakeholders, the Oversight Board's Plan of Adjustment gets the OK from Judge Laura Taylor Swain, moving the commonwealth closer to emerging from bankruptcy.

To become law, the bill would have to pass the House of Representatives and Senate, gain the governor's signature, and avoid potential blocks by the Puerto Rico Oversight Board and lawsuits.

The Economic Activity Index is up 3.5% from a year earlier.

Swain rejected several legal challenges to the Plan of Adjustment. The Oversight Board must file a final amended plan by Friday.

The bankruptcy judge is unlikely to rule on the Plan of Adjustment and related legal documents until the federal government has filed its defense.

The credit unions had bought $976 million of Puerto Rico bonds and notes, which they alleged they were coerced to purchase by Puerto Rico government and its agencies.

One observer questions if enough money is available.

The Act 154 excise tax brought in 21% of revenue to the General Fund July to October.