Post by Logan on Jun 22, 2016 9:06:51 GMT -6
SAN JUAN, Puerto Rico — A group of bondholders on Tuesday sued Puerto Rico’s government as debt negotiations fell apart less than two weeks ahead of what would be the largest default in the island’s history.
The suit filed in New York by holders of general obligation bonds seeks to invalidate a debt moratorium and fiscal emergency law passed in early April as the island struggles to restructure $70 billion in public debt.
While Gov. Alejandro Garcia Padilla has not yet implemented a temporary debt moratorium, many speculate he will soon because Puerto Rico is expected to default on a payment of nearly $2 billion on July 1. That amount includes more than $700 million in general obligation bonds that are supposed to be guaranteed under the island’s constitution.
The lawsuit said bondholders relied on that key protection when they bought general obligation bonds two years ago.
Read more: www.chieftain.com/business/4867828-120/bonds-debt-puerto-rico
The suit filed in New York by holders of general obligation bonds seeks to invalidate a debt moratorium and fiscal emergency law passed in early April as the island struggles to restructure $70 billion in public debt.
While Gov. Alejandro Garcia Padilla has not yet implemented a temporary debt moratorium, many speculate he will soon because Puerto Rico is expected to default on a payment of nearly $2 billion on July 1. That amount includes more than $700 million in general obligation bonds that are supposed to be guaranteed under the island’s constitution.
The lawsuit said bondholders relied on that key protection when they bought general obligation bonds two years ago.
Read more: www.chieftain.com/business/4867828-120/bonds-debt-puerto-rico