Puerto Rico

The Oversight Board is following a belt-tightening strategy that some economists warn may squelch economic growth, putting bonds back into restructuring. Part I of a five-part series.

Puerto Rico, with more than $70 billion of bonds at stake, has become a testing ground of austerity for an economy in decline.

The index gained 0.4% year-over-year in October.

Swain insists that holders of 2012 and 2014 bonds, which have been challenged as illegal, be given litigation notice.

The Nov. 22 notice opened a 30 day window for the issuer to make a case that $877.9 million of bonds not be stripped of their tax-advantaged status.

Fitch raised PRASA bonds to CC from C even amid indications that the utility is discussing restructuring its debt.

The $10.2 billion is designated for long-term mitigation work to prevent a future recurrence of the damage and to make electrical grid improvements that will withstand future storms.

Bankruptcy mediator Barbara Houser recommends litigation over $22 billion in bonds should resume in January and February.

The board letter's is one of the first signs of friction with Gov. Wanda Vázquez, who took office in August.

Separately, the island's economic activity index fell on a year-over-over basis for the fourth straight month.