NEW YORK, Aug 26 (Reuters) - A group representing individual investors holding Puerto Rico debt launched on Wednesday, with the goal of protecting their investments and pushing for a financial control board for the U.S. commonwealth, among other measures.
The group, the Main Street Bondholders Coalition, formed by the 60 Plus Association, an elderly rights group that promotes less government involvement in senior issues, has several thousand people on its contact list, said 60 Plus spokesman Gerry Scimeca.
“The goal of this group is to keep seniors and pensioners and retirees from having their investments stolen from them from a manufactured crisis in Puerto Rico,” Scimeca said. “Really this is the launching point of an official coalition to speak with one voice on this.”
Puerto Rico’s Governor Alejandro Garcia Padilla shocked investors in June when he said the island’s debt, totaling $72 billion, was unpayable and required restructuring. A fiscal recovery plan is due to be developed by the end of this month.
“We’re looking for Congress to act, to authorize a control board ... so they can manage their finances,” Scimeca said.
The Main Street Bondholders Coalition is also against Puerto Rico accessing U.S. bankruptcy laws, an option that has been introduced in the House and Senate.
Scimeca said the group also plans to educate investors. A significant number of American mom-and-pop investors have exposure to Puerto Rico. About 52 percent of muni open-ended funds are invested in Puerto Rico bonds according to data from Morningstar.
The group will also reach out to lawmakers to make sure “bondholders are represented on terms that we think are most fair and equitable to everybody,” Scimeca said.
In 2009, 60 Plus launched the GM Main Street Bondholders Coalition to call attention to small investors in the General Motors Co bankruptcy negotiation process, according to a press release from 60 Plus. (Reporting by Jessica DiNapoli; Editing by Lisa Shumaker)