Puerto Rico

Assured Guaranty Ltd. and Ambac Financial Group Inc. filed a lawsuit challenging the constitutionality of Puerto Rico's revenue clawback strategy, fanning concern that a long, messy process lies ahead as the commonwealth seeks to restructure about $70 billion of public bond debt.

Insurance companies that guarantee Puerto Rico municipal debt filed a lawsuit challenging the constitutionality of the commonwealth's decision to divert revenue designated for some bonds to pay other creditors.

Lisa Donahue, the chief restructuring officer for the heavily indebted Puerto Rico Electric Power Authority, will be one of four panelists testifying at a House Natural Resources Committee panel hearing on Jan. 12 about the commonwealth’s energy problems.

A United States government argument in a criminal case being heard by the U.S. Supreme Court may backfire, leaving the U.S. responsible for paying Puerto Rico’s debt, a prominent Puerto Rico Senator said.

Ambac Assurance Corp. paid out $10.3 million to cover an insured portion of the $36 million that the Puerto Rico Infrastructure Finance Authority defaulted on Monday.

Two House Natural Resources Committee panels will hold hearings on Puerto Rico this month to discuss the possibility of energy reform and federal oversight for the ailing commonwealth, according to a committee spokesperson.

Bondholders are expected to weigh litigation against intensified negotiations with Puerto Rico this month, after the commonwealth missed $37 million of debt payments.

Standard & Poor's Ratings Services said it has lowered its rating on the Puerto Rico Infrastructure Financing Authority bonds secured by federal rum excise taxes to D from CC, following the authority's default on scheduled interest payments.

Puerto Rico’s financial crisis grew deeper Monday when it skipped $37.3 million in debt service payments.

Puerto Rico Gov. Alejandro García Padilla announced on Wednesday that the commonwealth will default on $37.3 million out of nearly $1 billion of debt payments due on Jan. 4, a “mild” default, according to one analyst, and one that could threaten the governor’s plans congressional help.