Law for Puerto Rico Government Development Bank’s debt-restructuring signed
SAN JUAN – Gov. Ricardo Rosselló has signed Senate Bill 908, which includes amendments to restructure the debt of the Puerto Rico Government Development Bank (GDB).
“This agreement reaffirms our desire to reach agreements with our creditors,” Rosselló said in the announcing release. “These amendments will simplify the processes in the management of the Bank’s debt and provide a $300 million relief for the municipalities…[which] will see debts canceled with the deposits they had in the GDB.”
Act 109 of 2017 created the legal framework for restructuring GDB debt was created, the governor said; however, “the effects of hurricanes Irma and María made it necessary to return to the negotiating table,” reads the release from his office, La Fortaleza, which adds that the “measure reflects the new agreements reached with most” of the banks creditors.
The new agreement allows the disbursement, “before the closing date of the GDB’s debt-restructuring transaction,” of 55% of the excess of the special additional contribution–a dedicated special tax levied on towns, known as CAE–to the municipalities that have “Excess CAE in the GDB that has not yet been disbursed. In this way, said municipalities will not have to wait until the closing date of the transaction,” the governor’s office stressed.
“The changes to the restructuring agreement negotiated by the Government will significantly benefit the municipalities and other participating depositors. This piece of legislation introduces the necessary amendments to allow the implementation of the new agreement for the restructuring of GDB debt. With the signing of this law we put an end to the restructuring of GDB debt, in a manner satisfactory to all parties,” GDB President Christian Sobrino Vega is quoted as saying in the release.
The governor further added that “this type of agreement gives us credibility before our creditors to continue with the restructuring of the debt of Puerto Rico and to be able to fulfill our obligations without affecting the most vulnerable. We are convinced that the amended agreement is in the best interest of the people of Puerto Rico, the creditors of the GDB and the economic recovery of Puerto Rico.”