Friday, August 12, 2022

Gov. García Padilla: It is Important that Talks with Creditors take Place

By on January 27, 2016

SAN JUAN – With sources telling Caribbean Business that debt-restructuring talks between the Puerto Rico government and its creditors are set to resume Friday, Gov. Alejandro García Padilla said Wednesday it is important for him that these talks take place.

When asked by this newspaper if he knew about this week’s potential meetings, the governor said that although he doesn’t know the exact details, he is aware of the conversations being held with creditors and their advisers.

“If the question is whether [talks] will be [held] this Friday, Thursday or Monday, I don’t know the date. But I’m aware. I have authorized the conversations,” García Padilla said. “For me, the important thing is these talks take place.”

Some creditor groups have recently argued that the commonwealth government has cancelled previously scheduled meetings and has dragged its feet on the matter. Some observers have pointed at the possibility that the administration is waiting to see what finally happens in Congress, particularly if it achieves access to a debt-restructuring regime. Puerto Rico continues to bank on congressional action during the first quarter of the year as it tries to avoid additional defaults amid a steeper debt-service schedule that begins this summer.

As previously reported by Caribbean Business on Tuesday, meetings between commonwealth advisers and creditors’ representatives have been scheduled for Friday, sources with knowledge of the situation said. During a briefing to the press earlier Tuesday, Public Affairs Secretary Jesús Manuel Ortiz said La Fortaleza didn’t have information on when debt-restructuring talks would resume.

Creditors were recently briefed on the revised long-term Fiscal & Economic Growth Plan (FEGP), which states a larger fiscal problem for the commonwealth and prompted a revision to the commonwealth’s debt-restructuring proposal to creditors. It is yet unknown whether the government’s fiscal team would be presenting creditors on Friday with a revised debt-restructuring proposal.

Commonwealth advisers officially announced in November the government’s intention to put together a “superbond” deal, whereby Puerto Rico bondholders would be able to exchange their existing commonwealth debt into new, more secure paper. The idea underpinning the proposal is to restructure, in one fell swoop, a large chunk of the island’s $70 billion debt, while taking into consideration the particularities of each type of commonwealth debt. GDB President & Chairwoman Melba Acosta recently confirmed that the administration still seeks the “superbond” deal.

“We are committed to engaging in conversations with our creditors and their advisers about our current fiscal standing,” the GDB chief stated when announcing the FEGP’s revision. “We continue our plan to develop a comprehensive set of solutions, including our thoughts regarding a restructuring proposal, wherein all parties make the necessary sacrifices that will support the long-term sustainability of the Commonwealth’s economy.”

You must be logged in to post a comment Login