Puerto Rico chief financial officer Melba Acosta Febo said Puerto Rico may pay some, though probably not all, of the commonwealth's general obligation bond debt due July 1.
Acosta Febo made the remark about what Bloomberg reports to be a scheduled $805 million payment after a debt conference Tuesday morning.
The amount that will be paid depends on how revenues come into Puerto Rico's Treasury Department, she said.
Since the summer of 2015, Puerto Rico has made three debt restructuring proposals to creditors, Acosta Febo said during the "Puerto Rico Restructuring" conference in New York, sponsored by DebtWire. It has publicized two of these proposals and is currently keeping the third confidential.
In response, general obligation bondholders have made two counterproposals, the Puerto Rico Sales Tax Corp. (COFINA) senior bond holders have made one counterproposal, and the COFINA junior bond holders have made one counterproposal. However, the counterproposals all take care of their own type of debt and leave little or nothing for Puerto Rico's other types of debt. If Puerto Rico accepted the proposals, Puerto Rico would end up paying more debt than it currently owes, Acosta Febo said.
This experience has led the commonwealth to the idea of converting all of the commonwealth's debt into a super bond. Acosta Febo said her government is trying to restructure $48 billion of the total $69 billion Puerto Rico public sector debt.
After the conference Acosta Febo said that Puerto Rico wanted a five year moratorium on the payment of debt principal during which it would pay interest. Puerto Rico would use the period to catch up on payments due to suppliers, invest in infrastructure projects, and do other things to improve the economy.
She said Puerto Rico is looking for a permanent solution to the debt crisis. It doesn't want to have to come back in five years and seek another debt restructuring. Puerto Rico is seeking an approach to its debt that would allow it to use 15% of its revenues each year for debt service. It will seek to use a cash flow approach to deal with its pensions rather than to build up the pension fund assets to actuarially required levels.
Asked about a Puerto Rico Treasury
