August 6, 2014 / 2:10 PM / 5 years ago

Chapter 9 extension a positive for Puerto Rico - Fitch

Aug 6 (Reuters) - 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)

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