WASHINGTON, June 30 (Reuters) - Puerto Rico raced to reassure investors on Monday that it will continue paying its general obligation and appropriation bonds, after a recently passed restructuring law for its public corporations spooked the municipal bond market.
“The recovery act explicitly excludes the Commonwealth and in no way indicates any shift in Puerto Rico’s historical and constitutionally supported commitment to honoring its financial obligations,” said Puerto Rico’s Treasury Secretary Melba Acosta Febo and Government Development Bank Chairman David Chafey.
“It is intended to provide a controlled and orderly process through which a public corporation can become financially self-sufficient.”
Last week, Puerto Rico passed a law allowing its most financially stressed public corporations - notably the Puerto Rico Electric Power Authority - to restructure their debts in a process akin to bankruptcy. But the law excluded both the commonwealth and the GDB from being able to restructure.
Reporting By Lisa Lambert; Editing by Chizu Nomiyama