Puerto Rico bankruptcy judge to approve amended debt plan

(Bloomberg) – The judge overseeing Puerto Rico’s bankruptcy has ordered the island’s financial supervisory board to revise its debt restructuring deal by Friday and plans to uphold that recovery plan soon after.

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United States District Court Judge Laura Taylor Swain detailed the changes she wants the board to make to the debt adjustment plan and submit the revised version by Friday 11:59 p.m. 10:59 p.m. Eastern Standard Time, according to an order. filed Monday evening.

This could mean that Puerto Rico’s more than four-year bankruptcy process, the largest ever in the $ 4 trillion municipal bond market, could finally start to come to an end this month. Once the board tabled the revised plan on Friday, Swain would “promptly” submit its confirmation order approving the debt restructuring plan, according to the judge’s order.

The supervisory board is reviewing Swain’s order and intends to file the revised debt plan by Friday, board spokesperson Matthias Rieker said in a statement on Monday following the order. by Swain.

“The supervisory board welcomes this latest progress towards confirmation of the plan, which would significantly reduce the total liabilities of the government of Puerto Rico,” Rieker said in the statement.

The restructuring deal would reduce $ 33 billion in debt and other obligations, including reducing $ 22 billion in bonds to $ 7.4 billion. This would ease Puerto Rico’s annual debt service payments and establish a reserve trust for its bankrupt retirement system, which owes current and future retirees about $ 55 billion.

Swain’s revisions, including the treatment of eminent domain claims allowed as guaranteed, rather than unsecured, and the fact that Puerto Rico must pay the full amount of what a court determines to be the value of those claims, according to the prescription.

Swain’s order included 149 page findings of fact and law and a 93-page confirmation order for the adjustment plan that the court is prepared to file “promptly” once the board submits its plan. revised debt.

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