Saturday, October 19, 2019

Bernier: Bondholders Willing to Negotiate to Avoid Default

By on April 12, 2016

SAN JUAN – The gubernatorial candidate for the Popular Democratic Party (PDP), David Bernier, held meetings in New York with Sales Tax Financing Corp. (Cofina), general obligation (GO) and Government Development Bank (GDB) creditors as well as insurers.

“I wanted to meet with the bondholders and personally reaffirm my interest to work together to find a way in order to avoid a default, which should be equitable and fair for them as well as for the people of Puerto Rico. The creditors have been a crucial part of our economic development and they need to remain so,” Bernier said in a statement Tuesday that adds he has insisted that efforts should focus on achieving a temporary solution that provides space for negotiations to continue.

“There is not enough time to conclude such a broad and complex agreement as the one presented this week by the government before the payments due May and July. We must therefore explore a transitory and short-term route to avoid the default, maintain stability and allow the country to continue negotiations, not imposed but in agreement between the parties,” the party president said.

Exploring that path was well-received by the bondholders, Bernier’s release says. Explaining exactly what that path involves, his statement lists deferring payment of the debt’s principal for five years, continuing to pay interest, financing to inject new capital into the economy, and a memorandum of understanding where an aggressive schedule of negotiations is set to achieve comprehensive debt restructuring in which safeguards are established for Puerto Rican bondholders and cooperatives.

“We must insist on this course of action since any Congressional decision will not be immediate. We have to defend our retirees and government suppliers who are caught up in debt, Puerto Rican bondholders, and most of all our citizens, who would be greatly affected by the consequences of a default. My recommendation to the Executive is to take the lead and control of the negotiations and not delegate such responsibility to their external advisers. Only the ones who suffer the consequences of the present situation can really understand the urgency of avoiding a default,” Bernier said.

Bernier heads to Washington, D.C., Wednesday to join the Puerto Rico delegation that is lobbying in Congress

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