Puerto Rico Gov. Alejandro García Padilla is preparing to submit a bill for a moratorium on the payment of Puerto Rico’s debt.
Shirley Cordero, spokeswoman for Chair of the Puerto Rico House Treasury and Budget Committee Rafael Hernández Montañez, confirmed the plans, which were first reported Friday on the El Vocero news web site.
Hernández Montañez said he thought it unlikely that the United States Congress will approve measures for Puerto Rico to deal with its financial crisis in the next few weeks, according to El Vocero.
García Padilla said Feb. 29 that Puerto Rico and the Government Development Bank for Puerto Rico doesn’t have enough money to make a full May 1 GDB debt payment. Bloomberg Briefs has reported the amount due at $432 million.
On July 1 Puerto Rico owes about $1.3 billion for bond payments. On that day the Puerto Rico Sales Tax Financing Corp. (COFINA), the University of Puerto Rico, and certain Puerto Rico public corporations and authorities owe about $600 million more.
Hernández Montañez said the governor is crafting the bill so that it would exempt government-guaranteed debt including general obligation debt from the moratorium, Cordero said.
The Bond Buyer tried to reach representatives of the governor, the GDB, and Chair of the Puerto Rico Senate Treasury and Finance Committee José Nadal Power for this story. They did not immediately respond.
Hernández Montañez was on a flight to Washington, D.C., and couldn’t be reached for comment. He is planning to attend the hearing of the Supreme Court on Tuesday where the judges will listen to arguments concerning Puerto Rico’s Public Corporation Debt Enforcement and Recovery Act.
Puerto Rico’s government passed this law as a bankruptcy means for Puerto Rico’s public corporations. Two lower levels of the United States court system have declared it to be contrary to the United States Bankruptcy code.
