Puerto Rico may have better chance of Supreme Court win after Scalia death
Financially troubled Puerto Rico's push for a debt restructuring program could get a lift from the death of conservative Justice Antonin Scalia, who was viewed as likely to oppose granting such relief in an upcoming U.S. Supreme Court case.
The highest U.S. federal court in December agreed to hear Puerto Rico's bid to reinstate a 2014 law called the Recovery Act after it was struck down by a lower court.
The government of the U.S. territory, which has around $70 billion in borrowings, hoped the act would help it to restructure its debt and pull it out of a fiscal crisis. It would give the Caribbean island more power to impose conditions on creditors in a debt restructuring, which could worsen creditor recoveries, bondholders had argued.
"Scalia has been a fairly aggressive defender of contractual rights over the years," said Height Securities analyst Daniel Hanson, who estimated the chances of a Puerto Rico victory have risen to around 30 percent from five percent after Scalia's death.