The Puerto Rico Oversight Board is seeking to start debt talks on April 13.
A board spokesman and two creditor sources confirmed the start date.
If debt talks started on April 13 it would be a full month after the board approved a 10-year fiscal plan, which was on March 13.
At that meeting Board Member Arthur Gonzalez said creditors and the board had been waiting for the fiscal plan to be approved before negotiating with the board in earnest. "In order to have an intelligent conversation you need to know what you are talking about," he said.
If the debt talks start on April 13 it would allow 17 days before the stay on litigation authorized by the Puerto Rico Oversight, Management, and Economic Stability Act would elapse.
The administration of Puerto Rico Gov. Ricardo Rosselló and others have said that before this would happen, the board would petition the local federal court to start a PROMESA bankruptcy process and this would end the consensual debt negotiation process. United States District Court for the District of Puerto Rico Judge Francisco Besosa would hear the case.
By scheduling the first meeting so late the board is showing it is "unserious" about debt negotiations, said a leading Puerto Rico bondholder source. "The board is recklessly delaying the start of negotiations," he said. Rosselló is going along with the board's delay.
The board is seeking to start mediation on April 13. Several creditors have rejected participating in mediation, arguing that it would take too long for creditors to agree on the ground rules and select a mediator.
On the one hand there is a possible mediation process between the claims of the general obligation and those of the Puerto Rico Sales Tax Finance Corp. (COFINA) bondholders and on the other there is possible a negotiation process over Puerto Rico's debt, the bondholder source said. The board is trying to treat these two things as if they were one thing. They should be separate, he said.
By delaying PROMESA's Title VI debt negotiations, the board is violating the act, the bondholder source said.
A source connected to the COFINA Senior bondholder group said: "The group has been asking to participate in good faith discussions for 12 months, so it's a net positive to see the government finally convene major stakeholders ahead of a likely Title III filing."
A board source said it had scheduled meetings with bondholders on April 13 and 14 and had set aside April 17 as a possible additional meeting date.
Representatives of the Rosselló administration didn't immediately respond to request for a comment.
