Puerto Rico Public Buildings Authority

The majority on the court said upholding the benefits could have opened the door to a broad range of other federal benefits to Puerto Rico residents.

Revenues were also up compared to the Oversight Board's projection made on Jan. 27.

The Economic Development Bank estimated the first half of fiscal 2022 had experienced a 5.5% increase in growth, upward from a 3.6% increase in previous estimates.

The governor highlighted the positive role of federal aid on the island.

The commonwealth's unemployment rate hit a record low in February.

Some critics say relying on federal aid may obscure the underlying problems Puerto Rico faces in the longer term as it emerges from bankruptcy.

Puerto Rico completed the exchange of more than $33 billion of existing bonds and other claims into $7 billion of new bonds plus cash and CVIs on Tuesday.

Restructured muni debt has "typically outperformed the broader muni market, as issuers emerge from bankruptcy with higher debt-servicing capacity and the debt re-enters the municipal high-yield index," noted PIMCO.

The ruling means the restructuring set for Tuesday will proceed.

The judges appeared skeptical about the need for a stay.