Aug 6 Puerto Rico and holders of debt of its public utilities will benefit from the introduction of Chapter 9 bankruptcy provisions governing the adjustment of municipal debt, ratings agency Fitch said on Wednesday.
"From a bankruptcy standpoint, the amendment would place Puerto Rico on an equal footing with the 50 States, who can currently use Chapter 9 to achieve debt adjustment for their municipalities," the ratings agency said.
On July 31, Puerto Rico's representative in Congress, Pedro Pierluisi, said he had introduced a bill to include Puerto Rico in Chapter 9 of the U.S. Bankruptcy Code. Allowing the Commonwealth's entities to file for Chapter 9 would be a failsafe if the Recovery Act is struck down. (Reporting by Arnab Sen in Bangalore)