Puerto Rico

The Oversight Board has reached an agreement with the Committee of Retirees that makes a flat 8.5% cut to pensions over $1,200 a month and does not change payments to the 61% of current retirees who receive monthly pensions of $1,200 or less.

The U.S. Senate has until July 14 to act.

Citing new uncertainties surrounding revenue credits, Moody's downgraded the Illinois State Toll Highway Authority ahead of a $300 million deal.

The Federal Open Market Committee is meeting this week and the muni market is looking for rate cut signals.

The overall recovery would be in the 36% to 38% range under its restructuring plan for $35 billion in bonds.

Another big week lies in store for the municipal bond market, with a variety of big name issuers ready to sell bonds.

The PRIDCO deal would be the fifth restructuring proposed or consummated under the Puerto Rico Oversight, Management, and Economic Stability Act of 2016.

The agreement “would increase prices by up to 21%” and it’s “highly unlikely PREPA will be able to completely offset the legacy debt charges,” resulting in “considerably higher electricity rates for decades to come,” said the letter signed by four senators and 32 House members.

The Oversight Board called the deal to reduce cuts to retirees a "crucial step" toward restructuring $25 billion in bonds and loans.

The new bonds would offer about 25 basis points less in interest.