Puerto Rico Said in Talks With Treasury to Restructure Debt
- Commonwealth general-obligation bonds rise to highest in week
- Proposal likely to face challenges in Washington, San Juan
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Puerto Rico and U.S. officials are discussing the issuance of new bonds administered by the Treasury Department to help restructure the commonwealth’s $73 billion debt burden, according to a person familiar with the discussions.
Under a proposal, the Treasury would administer an account holding at least some of the island’s tax revenue, the Wall Street Journal reported earlier, citing people familiar. Funds in the account would be used to pay holders of the new security, which would be issued to existing Puerto Rico bondholders in exchange for outstanding debt at a negotiated ratio. Investors would receive less debt but would have higher expectations for getting repaid, the paper said.