O’Melveny Worldwide

Bloomberg: Puerto Rico Bankruptcy Tab Nears $1 Billion As Case Nears End

November 8, 2021

US District Court Judge Laura Taylor Swain began confirmation hearings on Puerto Rico’s debt restructuring plan that will help diminish its US$33 billion of bonds and other debt. The island’s debt is the largest ever in the US$4 trillion municipal-bond market and has been prolonged by the likes of hurricanes, earthquakes, the removal of a governor from office, and COVID-19. “The people of Puerto Rico are now presented with an opportunity to adjust and erase billions of dollars of debt and pave the way for Puerto Rico to achieve fiscal responsibility and regain access to the capital markets,” O’Melveny partner and attorney for the commonwealth John Rapisardi said. Puerto Rico’s restructuring comes at a cost though as law firms and financial advisors have billed US$1 billion in fees that must be paid. “The oversight board’s debt plan will forgive US$3 billion of pension bonds and slash US$18.8 billion of general-obligation bonds and commonwealth-backed securities to US$7.4 billion.”

Bloomberg subscribers can read the full article here.