Post by Logan on Apr 30, 2016 3:30:12 GMT -6
Puerto Rico government bank reaches debt deal with some credit unions
SAN JUAN - Puerto Rico's Government Development Bank said it has reached a deal with credit unions to avoid defaulting on about $33 million of debt due on Monday.
The GDB, Puerto Rico's primary fiscal agent, said in a statement on Friday that it was still negotiating with other creditors in hopes of avoiding default on another $422 million due on Monday. The terms of the deal struck with the credit unions, according to the statement in Spanish, are also "available to other ... creditors of the GDB, including other institutional bondholders."
The credit unions will exchange their debt for new notes due on May 1, 2017.
GDB's indebtedness, about $4 billion in total, is part of a $70 billion debt load in Puerto Rico, the U.S. territory facing a decade-long recession, 45 percent poverty rate and shrinking population. GDB, which acts as a liquidity source for the island's public entities, is negotiating with hedge funds including Fir Tree, Solus and Claren Road in hopes of staving off a default that could threaten services and operations on the island.
Optimism for a deal has been low, with Governor Alejandro Garcia Padilla saying this week that "there will be a default on Monday," and a source close to talks telling Reuters there is "no indication" of progress on a deal.
Read more: www.jamestownsun.com/news/nation-and-world/4021759-puerto-rico-govt-bank-reaches-debt-deal-some-credit-unions
SAN JUAN - Puerto Rico's Government Development Bank said it has reached a deal with credit unions to avoid defaulting on about $33 million of debt due on Monday.
The GDB, Puerto Rico's primary fiscal agent, said in a statement on Friday that it was still negotiating with other creditors in hopes of avoiding default on another $422 million due on Monday. The terms of the deal struck with the credit unions, according to the statement in Spanish, are also "available to other ... creditors of the GDB, including other institutional bondholders."
The credit unions will exchange their debt for new notes due on May 1, 2017.
GDB's indebtedness, about $4 billion in total, is part of a $70 billion debt load in Puerto Rico, the U.S. territory facing a decade-long recession, 45 percent poverty rate and shrinking population. GDB, which acts as a liquidity source for the island's public entities, is negotiating with hedge funds including Fir Tree, Solus and Claren Road in hopes of staving off a default that could threaten services and operations on the island.
Optimism for a deal has been low, with Governor Alejandro Garcia Padilla saying this week that "there will be a default on Monday," and a source close to talks telling Reuters there is "no indication" of progress on a deal.
Read more: www.jamestownsun.com/news/nation-and-world/4021759-puerto-rico-govt-bank-reaches-debt-deal-some-credit-unions