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The
agreement establishes terms for the restructuring of more than
$18 billion of Puerto Rico's General Obligation (GO) and Public
Buildings Authority (PBA) debt, according to the Financial
Oversight and Management Board, which filed a form of bankruptcy
for the island in 2017 in an effort to restructure about $120
billion of debt and pension obligations.
While the deal has the support of creditors holding about $3
billion in GO and PBA claims, it faces opposition from Puerto
Rico’s government.
The deal will be part of a debt-adjustment plan the oversight
board said it expects to file in federal court within 30 days to
address Puerto Rico’s pension and other core government debt.
The board, which reached a deal with a retirees committee last
week over a more than $50 billion of unfunded pension liability,
said bondholders and other parties acknowledge that "Puerto
Rico’s difficult financial situation requires a meaningful
reduction in its debt burden to a sustainable level."
The Puerto Rico Fiscal Agency and Financial Advisory Authority
on Sunday reiterated its opposition to the upcoming plan of
adjustment mainly because it includes a reduction in pension
payments to certain retirees.
"The oversight board, creditors and other interested parties are
well aware that without participation of the Government of
Puerto Rico through legislative, executive and administrative
action, no plan is feasible, no agreement can be executed, and
no security will be marketable,” the authority said in a
statement.
(Reporting by Angela Moon; Editing by Karen Pierog and Sonya
Hepinstall)
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