Puerto Rico: irtenbiderako bideaz hitz bi

1 Ikus http://www.zerohedge.com/news/2016-05-02/2008-deja-vu-treasury-warns-congress-bailout-puerto-rico-or-risk-chaotic-unwinds-cas.

2 Ingelesez: “In a disappointingly similar tone to the warnings, threats, and promises sent to Congress in 2008 when demanding the banks get their bailout (or else), Treasury Secretary Jack lew has released a letter he sent to Congress warning that if Puerto Rico’s situation is not “fixed” in an “orderly” manner “quickly” then the nation will face “cascading defaults.”

• *LEW: PUERTO RICO NEEDS ORDERLY RESTRUCTURING TO ADDRESS DEBTS

• *LEW WARNS OF `CASCADING DEFAULTS’ WITHOUT PUERTO RICO DEBT FIX

• *LEW SAYS CONGRESS MUST WORK QUICKLY ON PUERTO RICO LEGISLATION”

3 Ingelesez: “I am writing to follow up on my January letter regarding Puerto Rico’s debt crisis and to provide information on the mounting costs of congressional inaction.  More than six months ago, the Administration introduced a comprehensive legislative plan to resolve this crisis.  In my January letter, I noted that absent timely congressional action Puerto Rico’s fiscal, economic, and humanitarian situation would continue to deteriorate.

Since then, constructive, bipartisan discussions have taken place, and a bill has been introduced, but Congress has yet to produce a workable legislative response. Meanwhile, the crisis in Puerto Rico has deepened.  In an effort to protect government deposits at Puerto Rico’s Government Development Bank (GDB), the Governor has declared a state of emergency and invoked the temporary debt moratorium powers recently provided to him by the Puerto Rico legislature. Yesterday, the Governor announced that the GDB would be unable to make a $400 million principal payment due today on its $3.8 billion of debt.  While a portion of bondholders are negotiating a restructuring of this debt, any such deal would require the participation of all GDB creditors and thus effectively would be conditioned on federal legislation providing a restructuring authority.

Today’s expected default is only the latest in a series that began last summer.  Since last August, the Public Finance Corporation has failed to make debt service payments on its $1.1 billion of outstanding debt.  In December, the Governor invoked his constitutional “clawback” authority to transfer funds allocated to one set of bondholders in order to pay another.  This “clawback” in turn resulted in the default of $1.9 billion of rum tax bonds and likely has put Puerto Rico on a path to defaulting on another $5.1 billion of highway and hotel tax bonds over subsequent months.

More bond payments, some very large, are coming due soon.  On July 1, Puerto Rico will face nearly $2 billion worth of payments, including almost $800 million of General Obligation debt.  Puerto Rico does not anticipate having sufficient funds to meet these and other obligations, leaving it with the impossible choice of paying its creditors or providing essential government services.  Going forward, Puerto Rico’s $70 billion of debt is unsustainable by any measure.  It simply cannot afford to pay its debt.  And, with a shrinking economy because of people leaving Puerto Rico, further reductions in government spending will be difficult to implement.  Government expenditures, net of debt service, already have been reduced to the lowest level since 2005.

With no orderly restructuring framework to address its debts, Puerto Rico will face a series of cascading defaults.  (…)

This is not just a matter of financial liabilities and litigation.  As I underscored in my January letter, the human costs for the 3.5 million Americans in Puerto Rico are real.  And they are escalating daily. (…)

Congress must work quickly to resolve the few outstanding issues on the proposed legislation to help Puerto Rico.  (…)

In the coming days, (…) Absent enactment of a workable framework for restructuring Puerto Rico’s debts, bondholders will experience a lengthy, disorderly, and chaotic unwinding, with non-payment for many a real possibility.  The people of Puerto Rico will be forced to endure additional suffering.  And, unless Congress passes legislation that includes appropriate restructuring and oversight tools, a taxpayer?funded bailout may become the only legislative course available to address an escalating crisis. 

We appreciate you and those Members of Congress who have been working across the aisle to help put Puerto Rico on a sustainable path forward.” 

4 Ikus http://www.theatlantic.com/business/archive/2016/05/puerto-ricos-biggest-default-yet/480843. /

5 Ingelesez: The island’s missed a major payment, and the next one could be even larger.

On Monday, Puerto Rico missed a $422 million payment to its debtors. It’s not the first time that the island will default on a payment, but it is so far the largest, most notable, and most concerning development since a dismal report last summer about the territory’s economic standing.”

6Ingelesez: “In a speech Sunday night, Puerto Rico Governor Alejandro García Padilla said, “Faced with the inability to meet the demands of our creditors and the needs of our people, I had to make a choice. I decided that essential services for the 3.5 million American citizens in Puerto Rico came first.” The island has long struggled with unemployment and poverty, but the financial situation on the island has gotten continually worse over the past 10 months; in order to pay out the debts owed on Puerto Rican bonds, the territory has reduced funding to schools and health-care programs and raised its sales tax.

García Padilla has now instituted a debt moratorium, meaning that the territory won’t spend money on debt payments for the time being (though for now it will continue to make interest payments on that debt). Monday’s missed payment is significant both because of the sum of money is large and because the Government Development Bank, the island’s main bond issuer, is a respected financial entity.”