New Bondholder Group Demands Representation in Debt Discussions

SAN JUAN – A group of individual holders of Puerto Rico bonds announced Sunday the creation of Backyard Bondholders (“Bonistas del Patio”), which seeks to “be heard” in the negotiations between the Puerto Rico Government, the U.S. House of Representatives and other bondholders on debt restructuring.

Backyard Bondholders said in a statement that it aims to advocate for local bondholders who own approximately $14 billion, or 20%, of the commonwealth’s debt. “Due to public confusion on this important issue, Backyard Bondholders is engaged with key decision-makers to prevent misguided decisions from disparately penalizing the savings of thousands of Americans in Puerto Rico. Every one of us has worked hard, saved and invested our hard-earned savings in Puerto Rico,” the group’s statement reads.

“The future of Puerto Rico and the repayment of our savings that were invested in its bonds, is being negotiated in Puerto Rico and Washington, D.C., without our input. The local bondholders have so far been absent throughout this discussion. Now we will be heard,” Jorge Irizarry, executive director of Backyard Bondholders, says in the release.

Hilda Soto has breakfast as she reads a newspaper article about the speech Gov. Alejandro García Padilla gave regarding the government’s $70 billion debt, June 30, 2015, in San Juan. (Photo by Joe Raedle/Getty Images)

The group explains that local bondholders are people who have “dedicated their lives to economic development, job creation and boosting Puerto Rico’s economy,” and argues that the money these lent to the government was made on the island and was “continually reinvested in Puerto Rico.” It is concerned that island residents, as opposed to non-residents, will be taxed to repay all the debt, “including ours,” which until now, had no representation, according to the statement.

“Our participation is key to [ensure] justice in the decisions [made] in relation to the fiscal crisis. To decapitalize the local bondholder would be a mortal blow to the local economy of Puerto Rico,” Irizarry added.

The organization has stateside and Puerto Rico advisers and says it continues to grow by actively recruiting local bondholders. The group hired Washington, D.C.-based law firm Williams & Jensen, which will work with a local firm the group says it will be announcing.

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