July 8, 2015 / 9:56 PM / 4 years ago

Citi to work with Puerto Rico on broker-dealer basis - source

NEW YORK, July 8 (Reuters) - Puerto Rico has hired Citi as a broker-dealer as the island seeks to restructure its debt, an industry source said on Wednesday.

The bank will host a meeting with creditors in New York on Monday, Melba Acosta, head of the island’s Government Development Bank, said on Tuesday. That will be the first meeting with creditors since Governor Alejandro Garcia Padilla said a week ago that he wants to restructure its $72 billion debt.

The island is working with a range of advisors and lawyers, including law firms Cleary Gottlieb and Kirkland & Ellis, and restructuring advisory firm Millstein & Co, Acosta said on Tuesday.

“As main bankers in this process we have Citi ... and as general restructuring coordinator we have Millstein,” Acosta said on Tuesday. “This doesn’t mean they are the only ones. For example, there may be transactions in which we have Citi and a second bank.”

Acosta did not specify Citi’s exact role on Tuesday.

But the source, who requested anonymity because the matter is confidential, said Citi will act as a broker-dealer, executing potential processes which are part of the restructuring such as tenders or exchanges.

A report by former IMF economists released last week suggested a debt restructuring by way of a voluntary exchange of existing bonds for new ones with a longer or lower debt service profile.

Puerto Rico’s Government Development Bank also in January appointed municipal adviser Public Financial Management to advise on capital financing.

A spokeswoman for Kirkland & Ellis said the firm represents the Commonwealth of Puerto Rico, the governor and the secretary of justice (attorney general).

Cleary and PFM did not immediately respond to requests for comment. A spokeswoman for Millstein declined to comment. A spokesman for Citi declined to comment.

Reporting by Megan Davies and a contributor in Puerto Rico; Editing by Richard Chang

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