Welcome to Muni Minute, a new Bond Buyer weekly video series examining, in 60 seconds, a top story municipal bond market participants should have on their radars for the coming week. This week, we look at what's happening in Puerto Rico as the U.S. Congress holds hearings Tuesday on whether to create a federal oversight board for the commonwealth.
VOICE OVER: Puerto Rico comes into sharp focus this week at the US Congress gets ready to hold hearings on creating a federal oversight board for the Commonwealth. Lawmakers are thinking of ways to help the Island, which is already defaulted on some of its $70 billion of public sector debt. On February second a half panel will hear from experts about setting up a municipal assistance type control board like New York had in 1970's. Congress is also looking at extending chapter nine bankruptcy protection to the commonwealth or to its public authorities. Puerto Rico officials are trying to work out deals with bondholders who would cut down its debt deadline and the next deadline is February 1st.
Puerto Rico faces payments of over $300 million of various creditors by the end of the day. All these compliments widespread discontent among those living there. Puerto Rico’s unemployment rate is over 12% compared to 5% in the US, and with 45% of its people living in poverty ,Puerto Rico has seen its population plunge over 10% in the past 10 years as many residents or citizens of the United States head to Florida. I'm Chip Barnett, and this has been your Muni Minute.