SAN JUAN (Reuters) - Puerto Rico’s Government Development Bank said it will meet with lawyers and financial advisers to its creditors on Friday to discuss ongoing debt restructuring talks for the U.S. commonwealth facing $72 billion in debt.
The meeting, to be held in New York, is open to those who have signed non-disclosure agreements, and will include advisers to holders of Puerto Rico’s general obligation debt, sales tax-backed COFINA debt, and bonds issued by GDB, according to a GDB statement on Thursday.
The GDB has said it wants to engineer a universal exchange offer in which creditors from all debt classes could participate. Friday’s meeting is designed to give creditors more information about the potential deal, though no offer will be made at the meeting, the statement said.
“The proposed restructuring process is a comprehensive plan that will benefit all parties while supporting the creation of a sustainable path forward” for Puerto Rico, GDB President Melba Acosta said in the statement.
Creditors have been resistant to cuts to their repayment, insisting that Governor Alejandro Garcia Padilla’s administration do more to curb spending, boost government efficiency and promote economic growth. In addition to its debt load, Puerto Rico faces a stalled economy, 45 percent poverty rate and high emigration to the mainland U.S. Its $355 million payment due on Dec. 1 is vulnerable to at least partial default, Moody’s said last week.
Some of Puerto Rico’s public agencies are also in financial straits. Power utility PREPA on Friday faces a deadline to strike a consensual restructuring deal with companies that insure some of its $8 billion in debt, though the deadline has been extended in the past and could well be again.
The deadline stems from a restructuring deal PREPA reached with some of its bondholders, which requires support from the insurers. The bondholders can walk away from the deal if the insurers don’t sign on by Friday.
An extension is likely in light of the fact that the deal also sets a Friday deadline for Puerto Rico’s legislature to pass a bill formalizing the deal, a target that can’t be met because Puerto Rico’s legislative session ended on Tuesday.
Garcia Padilla is expected to a call a special session in December to take up the bill.
Reporting by Nick Brown; Editing by Chizu Nomiyama and Phil Berlowitz