March 24, 2018 / 12:31 AM / in 4 months

Puerto Rico board postpones certification of island's fiscal plans

(Reuters) - Puerto Rico’s federally appointed Financial Oversight and Management Board said on Friday it would postpone certification of the bankrupt U.S. commonwealth’s fiscal plan and announce a new certification date soon.

The flags of the U.S. and Puerto Rico fly outside the Capitol building in San Juan, Puerto Rico May 4, 2017. REUTERS/ Alvin Baez

The board said it would also reschedule the plans to transform the island’s deficit for its power and water authorities, Puerto Rico Electric Power Authority (PREPA) and the Puerto Rico Aqueduct and Sewers Authority (PRASA).

Asked about the reason for the decision, a spokesman said the board “is continuing to work with the government on the details of the plans.”

The board is tasked with helping the U.S. territory manage its finances as it navigates the biggest bankruptcy in U.S. government history, trying to shed $120 billion in bond and pension debt.

Natalie Jaresko, who leads the oversight board’s executive team, told Reuters she had expected the revised fiscal reform plans submitted by Puerto Rico’s government to be certified on Monday.

Jaresko had highlighted three critical structural reform areas - the electrical grid, overseen by PREPA; labor market reforms; and making it easier to do business.

Puerto Rico’s benchmark bond price hit a 22-week high earlier this week as creditors anticipated the approval of this plan at the board’s scheduled meeting on Monday in San Juan.

Governor Ricardo Rossello released a revised fiscal plan last month that would use $18 billion of additional money from the U.S. federal budget to help transform the island’s deficit into a $3.4 billion surplus within six years.

Reporting by Nivedita Balu in Bengaluru; Editing by Cynthia Osterman and Leslie Adler

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