NEW YORK, (Reuters) – Puerto Rico disclosed yesterday that negotiations with creditors ended without an agreement to restructure some of the island’s $70 billion debt load.
The two sides remained far apart over how to resolve a debt exchange on both the General Obligation debt issued by the U.S. commonwealth and debt backed by sales tax receipts referred to as COFINA.
A government statement said the talks with certain groups of creditors “are no longer continuing” on a non-public basis.
In a statement last night, Puerto Rico Governor Alejandro Garcia Padilla urged the U.S. Congress to take action on legislation to resolve the credit crisis, while chiding the bondholders for offering what amounted to only short-term debt relief.
“Put another way, these counterproposals would have simply scooped up the economic problems of today and tossed them to some later date for our children to solve,” he said.
On July 1, Puerto Rico faces a $1.9 billion payment on a collection of bonds that Garcia Padilla has said it cannot pay.
A rare piece of bipartisan legislation in the U.S. Congress would establish a federal oversight board to negotiate various debt restructurings while seeking to institute balanced budgets on the island, a U.S. territory with 3.5 million residents.
The “Puerto Rico Oversight, Management and Econo-mic Stability Act,” or PROMESA, passed the House of Representatives and awaits a vote in the Senate, which the Republican leadership says will come before the end of June.
