Puerto Rican debt restructuring will see legal hurdles

2015 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Turning Point ◽  
Spillover Effects ◽  
Structural Reform ◽  
Municipal Bond ◽  
Contagion Effect ◽  
Debt Restructuring ◽  
Content Type ◽  
Borrowing Costs

Significance The same day saw the release of a report, authored by former IMF economists, outlining a programme of structural reform and sweeping debt restructuring. Puerto Rico has seen its fiscal situation deteriorate for years, but with a series of debt repayments due in the next few days and the report, the crisis appears to be reaching a turning point. Impacts Tax-free municipal bond instruments are widely held by individuals, who will suffer from defaults. These investments are typically not leveraged, thus limiting the potential contagion effect of a default. Spillover effects could nonetheless raise the borrowing costs of the most vulnerable borrowers, such as Chicago.

Puerto Rican fiscal crunch is approaching Congress

2015 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Democratic Party ◽  
Corporate Tax ◽  
Tax System ◽  
Content Type ◽  
Working Age ◽  
Working Age Population

Significance Puerto Rico has suffered from an inability to service its debts, as its economy has been in or near recession since 2005. Its population has declined -- especially the working age population -- as residents, who are US citizens, have moved to the mainland to look for work. The governor has proposed an overhaul of the tax system in an attempt to raise revenues. Impacts Tax breaks for US companies operating in Puerto Rico may be part of a corporate tax overhaul. There is little prospect for such legislation this Congress, but a fiscal crunch could spur a separate bill. The Democratic party would probably split, as opposition to corporate tax breaks would clash with its Hispanic base.

Puerto Rican shutdown would increase default fears

2015 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Content Type ◽  
Us Congress ◽  
Federal Intervention ◽  
Congressional Vote ◽  
General Obligation Bonds ◽  
General Obligation ◽  
The Us ◽  
The Government

Significance Puerto Rico is facing a severe fiscal crunch; its general obligation bonds are rated junk status and the government has said that a 2.9 billion dollar bond issuance -- at risk because of the congressional vote -- is required to prevent a shutdown in the next three months. Impacts There is little-to-no prospect of Puerto Rican statehood while Republicans control the US Congress. Puerto Rico would gain five representatives and two senators, likely to vote Democratic. However, this may encourage some Republicans to back federal intervention on debt, to ward off calls for statehood.

Default signals further slide for Puerto Rico in 2016

2016 ◽  
Keyword(s):  
United States ◽  
Puerto Rico ◽  
Puerto Rican ◽  
Public Services ◽  
Control Policy ◽  
Gun Control ◽  
Public Agencies ◽  
Content Type ◽  
Presidential Candidates ◽  
Puerto Rican Diaspora

Significance The island's government and public agencies hold 72 billion dollars of debt obligations, but migration to the mainland United States, political unwillingness to cut spending and constitutional difficulties have triggered a severe crisis. Federal US and Puerto Rican lawmakers are concerned that austerity-driven cuts to public services would only exacerbate the problems of the commonwealth. Impacts The Puerto Rican diaspora in Florida may punish Republicans at the ballot box in the event of federal inaction. Anti-gun-control policy 'riders' may scupper congressional efforts to aid Puerto Rico in March. Relief for Puerto Rico may become a vote-winning issue for Democratic presidential candidates in the party primaries.

Puerto Rican electricity plan will be of minor help

2015 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Content Type

Headline PUERTO RICO: Electricity funding will be of minor help

scholarly journals Where Credit is due: on the Puerto Rican Debt Crisis

2017 ◽  
Vol 9 (1) ◽  
pp. 6-16
Author(s):  
Eric Joshi ◽  
Amogh Joshi
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
The United States ◽  
Negotiation Process ◽  
Unique Contribution ◽  
Debt Restructuring ◽  
Macroeconomic Indicators ◽  
Restructuring Process

This paper provides a comprehensive breakdown of the ongoing economic crisis in the Commonwealth of Puerto Rico. It explores the backdrop of the crisis by analyzing Puerto Rico’s relationship with the U.S., macroeconomic indicators and pertinent legislations. It’s entirely unique contribution is the analysis of the newly introduced act- PROMESA, which enables Puerto Rico to restructure its debt. We have provided an explanation of the important sections of this legislation which govern the debt negotiation process. The PROMESA act has been extended to apply to other unincorporated territories of the United States as well should they run into arrears, which broadens the scope of this paper. We have extended the findings of pre-existing body of work on sovereign debt restructuring hurdles and explained how PROMESA addresses them. We have also used previous works to suggest measures to expedite Puerto Rico’s debt restructuring process with creditors. This paper could also serve as a handbook for creditors looking to navigate through the post-PROMESA debt restructuring process.

Puerto Rican budget and statehood wrangles will worsen

2018 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Policy Making ◽  
Economic Recovery ◽  
Foreign Investor ◽  
Control Board ◽  
Content Type ◽  
Investor Confidence ◽  
The Us

Significance Fiscal pressures are causing controversy in Puerto Rico, but so too is fiscal policy-making. On July 5, Governor Ricardo Rossello announced that he would seek a court injunction that would prevent the budget he has signed from being disallowed in favour of the nearly 9-billion-dollar budget devised by the US-based federal fiscal control board. Impacts Domestic and foreign investor confidence in Puerto Rico is likely to fall further, complicating economic recovery and reform. The episode will further damage Puerto Rican politicians’ credibility when they make representations to Washington. The polarisation over Puerto Rico’s long-term future, and the US statehood question, will deepen. Delays in repairing the island’s economy, and then reforming it for the future, could see worker outflows.

Puerto Rico control board will squeeze debt holdouts

2017 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Status Quo ◽  
Control Board ◽  
Donald Trump ◽  
Content Type ◽  
Us History ◽  
Bright Spots ◽  
The Status ◽  
Pension Liabilities

Significance The announcement would mark the largest subnational bankruptcy in US history, with Puerto Rico facing debt obligations of 73 billion dollars from an array of public entities and 49 billion dollars of unfunded pension liabilities. Demonstrators on May 1 in the capital of San Juan criticised Puerto Rico Governor Ricardo Rossello’s administration, US lawmakers, the island’s federal fiscal control board and budgetary austerity. Impacts Mulled port improvements and electricity liberalisation reforms could offer some economic bright spots for Puerto Rico. A June referendum on Puerto Rico’s status is unlikely to clarify a path from the status quo as an indebted and unincorporated US territory. US President Donald Trump will oppose any congressional efforts to boost federal transfers to Puerto Rico. However, Democrats may attempt to secure greater funding in legislative negotiations to cater to urban expatriate Puerto Rican voters.

Market reactions to private equity announcements and intra-industry information spillover

2016 ◽  
Vol 42 (7) ◽  
pp. 722-742 ◽  
Author(s):  
Kung-Chi Chen ◽  
Lee-Young Cheng ◽  
Sheng-Jie Huang ◽  
Yan Zhao
Keyword(s):  
Market Power ◽  
Private Equity ◽  
Strategic Alliance ◽  
Abnormal Returns ◽  
Spillover Effects ◽  
Contagion Effect ◽  
Market Reactions ◽  
Content Type ◽  
Information Spillover

Purpose – The purpose of this paper is to examine market reactions to private equity placements and intra-industry information spillover effects in the Taiwan Stock Exchange. Design/methodology/approach – The authors first use the market model to compute the abnormal announcement returns. To examine the joint impact of the private investment in public equity (PIPE) purposes and the lead investor industry, the authors regress the issuers’ cumulative abnormal returns (CARs) on the dummy variables of PIPE purposes and the lead investor industry. To study the spillover effects, the authors regress the rivals’ CARs on the issuers’ CARs, PIPE purposes, and the lead investor industry. Finally, the industry Herfindahl index is used as a proxy for the market power of issuers and rivals to examine its impact on the spillover effects. Findings – The authors find that issuing firms experience positive abnormal returns during the announcement period. Issuers enjoy more positive market reactions when the proceeds of offerings are primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the same industry. Furthermore, the authors show that the contagion effect dominates the competitive effect in private equity placements at the aggregate level. At the subsample level, the authors find competitive effect overpowers contagion effect when the purpose of offerings is primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the different industry. Finally, the authors show that rivals with relative lower market power enjoy more positive contagion effects. Originality/value – First, the analysis documents the simultaneous importance of both the purposes of private offerings and the lead investor’s industry on announcement reactions, which shed new light on the positive abnormal returns during the announcement period. Second, the study adds to the literature on the information spillover effects by analyzing the role played by purposes of offerings and rivals’ market power. This paper provides a more complete picture of the offsetting competitive and contagion effects.

Puerto Rico’s deadlock has ended, but problems persist

2019 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Effective Mass ◽  
Investor Sentiment ◽  
Economic Recovery ◽  
Content Type ◽  
Broad Agreement ◽  
Economic Difficulty ◽  
Business Confidence ◽  
Political Turmoil

Significance Vazquez did not seek the role, but it fell to her after the August 2 resignation of Ricardo Rossello, followed by the nine-member Puerto Rican Supreme Court’s unanimous ruling yesterday that his handpicked successor Pedro Pierluisi’s succession to the governorship was unconstitutional. This political turmoil comes as the island faces economic difficulty and other long-standing challenges. Impacts The experience of effective mass protests to remove Rossello could dent faith in formal politics and bring more protests. The unrest, and potential for more, may undermine business confidence and investor sentiment. Puerto Rico will factor in the 2020 US election, given the 5 million Puerto Rican voters on the mainland, many in Florida. Any broad agreement on political and regulatory reforms is unlikely to be crafted before 2021. The earliest timetable for any real economic recovery has been set back to the second half of the 2020s.

Another Puerto Rican governor could leave office soon

2019 ◽  
Keyword(s):  
Puerto Rico ◽  
Puerto Rican ◽  
Content Type

Headline PUERTO RICO: Another governor could leave office soon

Sign in / Sign up

Export Citation Format

Share Document