Hedge funds holding Puerto Rico’s general-obligation bonds are asking a court to stop the commonwealth from directing sales-tax revenue to repay other debt backed by that money because it violates the island’s constitution, Bloomberg News reported on Friday. It is the first legal action for the U.S. territory that pits general-obligation bondholders against investors of sales-tax debt.
Puerto Rico in Distress
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Puerto Rico's economic activity index (EAI) for August fell 1 percent from a year earlier, the U.S. territory's fiscal agency reported yesterday, Reuters reported. The Caribbean island's total EAI, an economic measurement correlated to gross national product, was 124.1 in August, the Puerto Rico Fiscal Agency and Financial Advisory Authority said in a monthly report.
Puerto Rico’s fiscal control board appointed Jose Carrion III chairman and set a two-week deadline for the commonwealth to produce a financial plan during its first meeting on Friday, the Wall Street Journal reported on Saturday. The meeting attracted about 50 demonstrators who surrounded the entrance to the Alexander Hamilton U.S.
Puerto Rico's governor said yesterday that he has proposed to the U.S. territory's fiscal oversight board a timeline to present the board with a financial turnaround plan in two weeks, Reuters reported. Governor Alejandro García Padilla announced the timeline as part of a televised address, ahead of the oversight board's first meeting, scheduled for today in New York.
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The Financial Oversight and Management Board for Puerto Rico was created under the Puerto Rico Oversight, Management and Economic Stability Act of 2016. The Board consists of seven members appointed by the President of the United States and one ex officio member designated by the Governor of Puerto Rico. Access information on the Board, documents, videos of meetings, calendar of events and live webcasts by clicking here.