Judge approves massive Puerto Rico debt restructuring deal
SAN JUAN, Puerto Rico (AP) _ A federal bankruptcy judge has approved a big debt restructuring plan for Puerto Rico in the first deal of its kind for the U.S. territory.
Monday’s ruling involves more than $17 billion in government bonds backed by a sales-and-use tax. It requires Puerto Rico to pay $32 billion in the next 40 years.
Senior bondholders, who hold nearly $8 billion, will collect first and receive 93 percent of the value of the original bonds. Junior bondholders, many of whom are individual Puerto Rican investors and overall hold nearly $10 billion, will recover only 54 percent.
A federal control board that oversees the island government’s finances said the deal will help revive Puerto Rico’s economy. Opponents say it will only create more debt for an island mired in a 12-year recession.