Puerto Rico

Over 100 local state-side government officials signed a letter calling for Puerto Rico to be allowed to declare bankruptcy.

Puerto Rico faces a $153 million cash deficit by December and a $512 million shortfall by June unless it takes additional financial measures, according to a consultant to the government.

Lobbying efforts more than doubled in the second quarter of this year over pending legislation that would give Puerto Rico utilities and authorities access to Chapter 9 bankruptcy protection.

Standard & Poor's Ratings Services said it has corrected by reinstating its D rating on Puerto Rico Public Finance Corp.'s series 2012A bonds due Aug. 1, 2015.

The Puerto Rico Aqueduct and Sewer Authority plans to sell a $750 million bond by the end of August, anticipating paying a roughly 10% interest rate.

The default by the Puerto Rico Public Finance Corporation is a credit negative for bond insurers MBIA Inc. and Assured Guaranty, who each have approximately $5 billion of exposure to the commonwealth, according to a report issued by Moody’s Investors Service.

Detroit's bankruptcy and Puerto Rico's default are similar to New York City's mid-1970s crisis, public finance veteran Richard Ravitch says.

Puerto Rico's recent decision to stop setting aside money for its general obligation bonds set off debate over how and whether the government will make its Jan. 1 GO payment.

Using dynamic scoring, the Joint Committee on Taxation has estimated that legislation to extend tax provisions, including several related to bonds and Puerto Rico, would result in only $86.56 billion of revenue losses, compared to its earlier estimated $96.95 billion.

Moody's Investors Service has reviewed the new restructuring proposal filed by the Puerto Rico Electric Power Authority (PREPA; Caa3 negative), which states that non-forbearing bondholders would recover 65%-70% of the original legal promise in cash, depending on maturity, and which makes default a virtual certainty.