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  #61  
Old 06-13-2016, 02:37 PM
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still waiting for Senate to act:

http://thehill.com/policy/finance/28...eads-to-senate

Quote:
Week ahead: Puerto Rico bill heads to Senate

After clearing the House on Thursday with a majority of support from both parties, a bill to help Puerto Rico handle its debt crisis is heading to the Senate.

The bill, which establishes a seven-person oversight board charged with restructuring more than $70 billion in debt, passed 297-127.

But senators have been lukewarm on the compromise, in May after months of delays and grueling talks between House leaders, the White House and Treasury Department.

Supporters say the bill is imperfect, but the only viable option to help Puerto Rico. The legislation contains several measures reluctantly supported by Democrats, but it survived attempts to strip them that could have sunk the bill.
Those closely tracking the issue said a strong show of support from the House could help speed the bill through the Senate before the July 4th recess. Sen. Bob Menendez (D-N.J.) has vowed to fight for changes to the bill, but similar efforts from House lawmakers failed.

The Senate will likely try to clear the bill ahead of a $2 billion debt payment due from the territory on July 1. And help can't come soon enough for Puerto Rico, where the shrinking economy has shuttered essential services as the island braces for Zika. Up to 25 percent of Puerto Ricans are expected to contract the virus, according to the Centers for Disease Control and Prevention.

more:
http://www.pbs.org/newshour/rundown/...-bill-quickly/
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  #62  
Old 06-20-2016, 04:21 PM
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while we're waiting for the Senate to do something....

http://www.bondbuyer.com/news/washin...1106462-1.html

Quote:
WASHINGTON – Even before the Senate takes up the House Puerto Rico bill, the names of several individuals are being floated as possible candidates for the oversight board the legislation would create.

Also, if the Senate amends the House-passed Puerto Rico relief bill but doesn’t pass it before June 23, the House wouldn’t be able to vote on the amended version until after July 5 when it returns from the July 4 recess. But sources say that may not matter because when Puerto Rico defaults on its largest amount of debt so far on July 1 and additional lawsuits are filed the bill, when passed, will temporarily halt any litigation.

Among the names that have been floated for the seven-member, presidentially appointed board are former New York Gov. George Pataki, Jones Day partner Kevyn Orr who oversaw Detroit’s bankruptcy, and former New York Lieutenant Gov. Richard Ravitch. Pataki has a residence in Puerto Rico and Orr served as Detroit’s emergency manager during its restructuring. Ravitch has a wide array of experience in the municipal market. He headed the New York State Urban Development Corp. and the Metropolitan Transportation Authority when the fiscally troubled New York City was under a control board established in the 1970s.

One source said Ravitch may be a controversial choice for the board as he was an early advocate for territory-wide restructuring, which has drawn opposition from some Republicans. Given their focus on restructuring, Ravitch and Orr also may be better candidates for the board’s executive director, a powerful position that the oversight board’s chair would appoint with the consent of the other board members, the source said.

......
If Puerto Rico misses the July 1 payment, creditors will likely sue to collect what they believe they are owed.

But if Congress wants to pass the bill before the expected default while allowing enough time for Senate amendments, the Senate would have to take the bill up early during the week of June 20, pass any amendments, and then hope the House approves the amendments by the end of the week. In its current form, the bill would create a board that would have the power to require balanced budgets and fiscal plans, as well as to file debt restructuring petitions on behalf of the commonwealth and its entities.

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  #63  
Old 07-16-2016, 06:22 AM
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http://observer.com/2016/06/did-fbi-...Gy-l4w.twitter

Quote:
Did FBI and Justice Dept. Enable Puerto Rico’s Financial Meltdown?
The FBI and DOJ stood by while government officials in Puerto Rico committed $11 billion dollars in financial fraud

SAN JUAN/TEMECULA—The ongoing controversy over Puerto Rico’s insolvency and efforts to enlist congressional support for legal bankruptcy protection for the U.S. territory have resulted in fingers being pointed at the local Federal Bureau of Investigation (FBI). Puerto Rico U.S. Attorney’s office is also under fire for an alleged failure to investigate and prevent a reportedly massive fraud that may have contributed to the island’s financial crisis.

I am CEO of Commercial Solar Power, Inc., a company that was reportedly forced into bankruptcy by what has been described as the “bizarre behavior” of the Puerto Rico Electric Power Authority (PREPA), which has been used to redirect as much as $100 million a year from the people of Puerto Rico to select government officials.

On February 24, 2015, a private lawsuit was filed using the Racketeer Influenced and Corrupt Organizations Act (RICO), claiming government officials at PREPA stole over one billion dollars in public money over 10 years and committed one of the largest municipal bond frauds in United States history.

.....
On June 24, 2015, the government of Puerto Rico issued a 23-page legislative report, no less than a detailed confession, which outlines how government officials in Puerto Rico conspired with Wall Street firms to commit $11 billion dollars in financial fraud.

After reviewing this document and other evidence for many months, I believe the FBI is claiming that the best prosecutors in the DOJ have not yet found criminal grounds to move forward.

According to the legislative report itself, PREPA paid previous bondholders with capital received from new investors, which is the classic hallmark of a Ponzi scheme.

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  #64  
Old 07-16-2016, 06:22 AM
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http://seekingalpha.com/news/3192898...mail_wsb&ifp=0

Quote:
Puerto Rico's fiscal challenges not over
Jul 13 2016, 02:25 ET | By: Yoel Minkoff, SA News Editor Contact this editor with comments or a news tip
Puerto Rico could be shut out of debt markets for two more years as it battles with fiscal challenges, warned Governor Alejandro Garcia Padilla, dubbing the recent emergency fiscal measures enacted by Washington as unsustainable."Puerto Rico will not endure any more austerity," he declared. Padilla hasn't been able to turn around the island's economy during his three years in office and will not be running for re-election in November.
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  #65  
Old 07-16-2016, 06:25 AM
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http://www.bloomberg.com/view/articl...isn-t-done-yet

Quote:
Congress's Work With Puerto Rico Isn't Done Yet
41
JULY 1, 2016 8:00 AM EDT
By
Editorial Board
The good news is that Congress has finally passed a bipartisan bill to help Puerto Rico dig out from its $70 billion in debt. The bad news is that the island is still a long way from economic recovery.

The federally appointed control board created by the law will enable the restructuring of Puerto Rico’s unsustainable debt and oversee its fiscal plans and economic policies. The law’s provisions are strict: In addition to approving all fiscal plans and budgets, the board can overturn noncompliant laws and accelerate the development of critical infrastructure projects. Puerto Rico must develop approved budgets for at least four consecutive years, with annual revenue in excess of expenses, before the board can be terminated.

....
Meanwhile, a provision in the just-passed bill to fast-track newer power plants may lower energy costs, but it has also riled environmentalists. Congress could make amends by supporting the island’s transition to natural gas and renewables, and pushing for the development of a cleaner Caribbean power grid -- something that would also help undermine Venezuela’s noxious petro-diplomacy.

One of Puerto Rico’s biggest challenges is tapping and shrinking its informal economy, which may amount for as much as one-quarter of its gross national product. Extending the Earned Income Tax Credit to Puerto Rico would both bring workers into the fold and fight poverty. So would granting Puerto Rico the flexibility to provide earning supplements and job training to welfare recipients willing to take jobs in the formal sector.

After the battle royale between the new law’s supporters and those who wrongly called it a “bailout,” Puerto Rico may be the last place to which Congress wants to return. But there is little doubt that its economy requires sustained attention: It has contracted every year but one since 2006. Unemployment is more than twice the national average, and nearly half the population is below the federal poverty line. Faced with dwindling opportunity, Puerto Ricans are moving to the mainland in growing numbers.

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  #66  
Old 07-16-2016, 06:26 AM
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http://fortune.com/2016/07/12/puerto...-bill-economy/

Quote:
Why the New Debt Relief Bill Won’t Fix Puerto Rico’s Financial Woes

.....
Thanks to the bill President Obama signed on June 30, the newly created oversight board, a federally appointed body, will dictate the economic fate of the island’s 3 million residents. The board is authorized to overrule the fiscal decisions of Puerto Rico’s elected government, and will do so in the name of that government. An entity Congress ostensibly created to rectify the island’s financial crisis, it will ultimately fall short of Washington’s goal of adequately addressing Puerto Rico’s financial woes while inflicting damage on federal-territorial relations.

Politically, the oversight board represents the re-imposition of direct colonial rule and shatters the myth of the Commonwealth’s autonomy. If the mere existence of this board is bad, its impending membership makes it worse. Congress designed it to eschew all but token Puerto Rican membership—the very people whose fate it will control. It’s an echo of the first half of the 20th century when U.S. presidents appointed the island’s governors—mostly monolingual English speakers with little, if any, understanding of the people they were about to rule—without input from the local populace. A majority of the board members, four out of seven, will be appointed from lists provided by House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. Given their strong ties to corporate interests, these two Republic leaders are highly likely to make appointments to satisfy Wall Street’s interests over those of Puerto Ricans. Thus, islanders are likely to see increases in already high local taxes, continued cuts in government services—moves that will add to the island’s already appalling unemployment rate—and are unlikely to see adequate debt forgiveness.

The likely budget cuts are coming at a time when some hospitals are closing or on the verge of closing their doors, while health professionals are confronting the proliferation of the Zika virus. Congress naturalized Puerto Ricans en masse 99 years ago and has conscripted them in every major conflict since World War I. Their ineligibility to serve on the very entity overseeing their financial fate suggests that although Puerto Ricans carry U.S. passports, theirs is a second-tier U.S. citizenship. And congressional rules regarding the board’s membership reinforces the contention that Puerto Rico is, in the words of the U.S. Supreme Court in Downes v. Bidwell, “foreign to the United States in a domestic sense.”

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  #67  
Old 07-16-2016, 06:27 AM
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http://www.nbcnews.com/news/latino/m...-force-n610386

Quote:
Marco Rubio Named to Puerto Rico Debt Crisis Task Force
by BRIAN LATIMER

Sen. Marco Rubio, R-Fla will be part of the bipartisan task force appointed by Congress as part of the legislation recently passed to tackle Puerto Rico's debt crisis.

The PROMESA bill, which is short for the Puerto Rico Oversight, Management, and Economic Stability Act, establishes a seven-member control board to oversee negotiations with creditors and the courts over reducing some debt. The bill requires the territory to create a fiscal plan to bring the island back from its current financial situation, all without using any taxpayer funds.

.....
PROMESA passed 68-30 in the U.S. Senate June 29 with support from three Puerto Rican members of Congress: Rep. Nydia Velazquez (D-NY), Rep. José Serrano (D-NY) and Rep. Raúl Labrador (R-ID). Rep. Luis Gutiérrez (D-IL) did not support the bill.

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  #68  
Old 07-29-2016, 05:26 PM
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http://www.bloomberg.com/news/articl...-owes-on-aug-1

Quote:
More Defaults Likely to Come: What Puerto Rico Owes on Aug. 1

Sales-tax payment of $256 million expected to be made
Island owes $1.3 million of interest on general obligations

It’s that time again for Puerto Rico bondholders.
The commonwealth and its agencies owe about $346 million in bond payments on Aug. 1, most of which goes toward repaying sales-tax supported debt. The deadline follows the island’s July 1 default on nearly $1 billion of principal and interest, the largest such payment failure in the history of the $3.7 trillion municipal bond market.
While sales-tax investors are set to be repaid with funds already in the bond trustee’s account, the Government Development Bank, which defaulted in May, faces another payment deadline. Some Puerto Rico entities started skipping payments a year ago, leading up to the commonwealth missing $780 million due on general obligations at the start of the month.
Puerto Rico and its agencies racked up $70 billion of debt after years of borrowing to paper over budget shortfalls. President Barack Obama on June 30 enacted a law to create a federal control board that will oversee any debt restructuring and monitor the island’s budgets. It also prohibits creditors from suing the commonwealth for repayment of debt.
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  #69  
Old 08-01-2016, 04:13 PM
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http://www.pionline.com/article/2016...-pension-funds

Quote:
The fiscal oversight board created by the Puerto Rico Oversight, Management and Economic Stability Act signed by President Barack Obama on June 30 will have exclusive authority to enact and enforce fiscal reforms to reverse a decade of budget deficits and unmanageable debt, with the ultimate goal being better access to capital markets. The board was needed, Mr. Obama said, to avoid “an escalating series of lawsuits between creditors and against Puerto Rico,” and an even deeper economic and humanitarian crisis.

That crisis is already there for the 163,000 current retirees and 167,000 workers — nearly 20% of the commonwealth's total workforce — who without access to Social Security are depending on their government pensions. “Puerto Rico's pension systems are at serious risk,” the U.S. Treasury Department warned in October.

The new law calls for the control board to address “adequate funding” for pensions, but the first order of business is conducting an independent analysis of a pension system criticized for unrealistically generous benefits and plagued by conflicting or missing financial information.

The latest financial statement, released in 2016 by KPMG for the Puerto Rico Employees' Retirement System, Hato Rey, showed assets of $3.4 billion and a funded ratio of 0.27%, as of June 30, 2014. Under Governmental Accounting Standards Board rules for underfunded plans that require more conservative discount rates, that meant a net pension liability of $30 billion. Adding in the pension funds for teachers and the judiciary bumps the net pension liability up to $33.7 billion.

After nearly a decade of missed contributions, the stressed pension system is now using investment income for operating cash, while employer contributions are being used to pay debt service on some bonds that were supposed to help address years of missed contributions. According to the U.S. Treasury, pension administrators “are being forced to sell pension assets to pay current benefits,” and once those assets are depleted, payments will have to come from the commonwealth's already overtaxed general fund, which faces a $28 billion fiscal shortfall over the next five years. “It is unclear how the commonwealth will find the resources to deliver promised pension benefits, make full payment on its debt, and operate essential public services,” the Treasury Department said.

Various reports prepared for U.S. and commonwealth officials have all three pension funds completely out of money by 2019 or sooner. According to a November 2015 commonwealth financial report, the system's assets were exhausted by fiscal 2015.

.....
Puerto Rico's seven-member control board will be appointed by Mr. Obama by Sept. 15, with six members recommended by House and Senate majority and minority leaders. Once installed, the board will have the authority to promote voluntary restructuring agreements with investors holding an estimated $70 billion in as many as two dozen types of bonds, and can adjust debts “in the best interests of creditors.”

Lawsuits filed by those creditors are now on hold for six months.

Control board members will have their hands full sorting out creditor claims against all the different bond issuers. And with Puerto Rico's July 1 default on $1 billion in general obligation bonds, “it makes it much harder to untangle,” said Greg Clark, head of municipal research for Debtwire Analytics in New York. “The revenue picture in Puerto Rico is harder to predict … and you have so many different parties. D.C. was a much easier situation for a control board to get its arms around,” said Mr. Clark, who adds that the control board's success will depend on cooperation from the Puerto Rican government, which will change after November elections. “I would expect the control board to prevail, but (creditors) are still going to get a haircut,” he said.

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  #70  
Old 08-27-2016, 09:31 AM
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https://www.ft.com/content/f9251a80-...a-c7ac04ef00aa

Quote:
Puerto Rico: An island’s exodus
With its manufacturing base depleted and its economy shrinking, people are leaving in droves

.....
The brain drain is acute and is having a severe effect on every aspect of Puerto Rican life. The island has lost paediatric doctors, and the island’s only air ambulance stopped services this year. Schoolteachers outside San Juan, the capital, have had to turn off the lights in the rain — a result of outdated and damaged fuseboxes.

Puerto Rico has admitted defeat in its battle to stay current on its debts and is preparing for restructuring talks with creditors. But none of the proposals by the US commonwealth or its lenders, including slashing its debts or an interest rate holiday, are likely to kick-start growth. Advisers to both sides concede that without being able to halt the economic rot — output has been in near-constant decline since 2007 — they could be back in negotiations within the next decade.

And that is before policymakers consider rapidly depleting federal funding for healthcare and the prospect of the end of a business tax that has provided roughly a fifth of the island’s revenue.

.....
Subsidy blow

The fiscal crisis has its roots in the end of a package of US tax incentives in 2006 that had made Puerto Rico attractive for manufacturers. Introduced in 1976, the incentive brought a wave of US multinationals to the island, including Eli Lilly, Merck, Pfizer and Johnson & Johnson.

By the early 1990s more than a tenth of the jobs on the island had a direct connection to the subsidy, according to the US Government Accountability Office. But its phase-out prompted companies to slash jobs — increasing the effects of the global financial crisis.

Puerto Rico borrowed to keep services running and to try to stimulate growth. More than $28bn was added to its debt load between 2006 and 2014.


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