Puerto Rico board frees up money; Virgin Islands rum distilleries OK

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The Puerto Rico Oversight Board freed up money for recovery two days after Hurricane Maria’s destructive visit to Puerto Rico and the U.S. Virgin Islands.

The board approved for the government of Gov. Ricardo Rosselló to “reallocate” up to $1 billion of its budget for emergency funding to recover from the hurricane’s effects. The current fiscal year General Fund budget is $9.56 billion.

“Our thoughts and prayers are with you and with the people of Puerto Rico during this difficult time,” Board chairman José Carríon III wrote in a letter to Rosselló. “We stand ready to assist you in ensuring the health and safety needs of the people.”

On Friday afternoon the National Weather Service reported that the dam on Lake Guajataca in northwest Puerto Rico was collapsing, leading to extreme danger for flash flooding downstream on Rio Guajataca. According to the weather service some parts of Puerto Rico received nearly 40 inches of rain from the hurricane.

In news concerning the other U.S. territory hit by Maria, a spokesman for the U.S. Virgin Islands government said “to the best of our knowledge” that the Cruzan and Diageo distilleries on St. Croix had gotten through the storm without damage and were still producing rum. Their output is the basis for the islands’ matching funds bonds, also known as “rum bonds.”

There is $1.1 billion in the matching fund bonds outstanding, according to Moody’s Investors Service. Like all of the Virgin Islands’ public sector bonds, these are not in default. The matching fund bonds are rated Caa1 by Moody’s, CCC-plus by S&P Global Ratings, and B by Fitch Ratings.

Gov. Kenneth Mapp reported Friday that Governor Juan Luis Hospital and Medical Center in St. Croix had been damaged. However, he said the island’s port authority believed the Ann Abramson Marine Facility pier in Frederiksted, St. Croix’s deep water cruise ship facility, was undamaged.

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Speculative grade bonds PROMESA Hurricane Maria Commonwealth of Puerto Rico Puerto Rico Infrastructure Financial Authority Puerto Rico Sales Tax Financing Corp (COFINA) Government of the Virgin Islands Puerto Rico U.S. Virgin Islands