March 5 Puerto Rico's Government Development Bank said Wednesday that it hired Millco Advisors LP, a Washington, D.C.-based affiliate of Millstein & Co LP to evaluate potential funding sources and financial proposals for the bank and the commonwealth.
Millstein is considered one of the top restructuring firms in the United States. Its CEO and founder Jim Millstein served as Chief Restructuring Officer at the U.S. Treasury until March 2011, overseeing the agency's huge investments to prop up the financial sector and designing the American International Group's restructuring.
Puerto Rico's announcement, made a week before the territory is expected to sell around $3 billion of bonds, is sure to roil a U.S. municipal bond market that is growing increasingly anxious about the troubled island's financial deterioration.
Puerto Rico is a territory and cannot file for protection under Chapter 9 of the bankruptcy code. But it said in a draft statement for the bond sale its central bank and financing agency, the GDB, is investigating measures akin to a bankruptcy filing.