Federal Judge to Sort $123 Billion in Debt for the US Territory of Puerto Rico
The US territory of Puerto Rico has begun a historic bankruptcy proceeding, the largest government bankruptcy since Detroit. On Wednesday, a US federal judge will start to sort out the US Territory’s $123 billion debt in a San Juan court.
Investors are looking to recover as much as they can on their bonds, but not sure if they will be able to recoup at the prices suggested under the financial recovery strategy.
Puerto Rico’s debt is still trading at elevated levels against what the island’s authorities have put aside for payment.
The Commonwealth is seeking to restructure over $70 billion in debt, from multiple agencies with another $45 billion in underfunded pension liabilities. However, various analysts are questioning that level of recovery. There are some suggestions that although 25 percent is what the Commonwealth identified as available to cover debt service, it may not mean total recovery.
There are 3.5 million US citizens in Puerto Rico and it has been in recession for the past decade with debt piling up to pay for essential services.
According to various reports, unemployment on the island is close to eleven percent while the poverty rate stands at 45 percent. In addition, the population is steadily dropping as islanders head for the mainland US.
The foregoing information, which is all publicly available, is being provided by The White Law Group.
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