{"id":20900,"date":"2016-06-04T13:51:59","date_gmt":"2016-06-04T18:51:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20900"},"modified":"2016-06-04T13:51:59","modified_gmt":"2016-06-04T18:51:59","slug":"bondholders-stunned-as-puerto-rico-finds-4-4-billion-in-outstanding-debt-unconstitutional","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20900","title":{"rendered":"Bondholders Stunned As Puerto Rico Finds $4.4 Billion In Outstanding Debt “Unconstitutional”"},"content":{"rendered":"

Bondholders Stunned As Puerto Rico Finds $4.4 Billion In Outstanding Debt “Unconstitutional”<\/a><\/h3>\n
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After Puerto Rico\u00a0defaulted on its $422 million debt payment in May<\/a>, governor Padilla begged congress to step in and help out, which happened shortly thereafter when a\u00a0House committee cleared legislation\u00a0<\/a>that provided Puerto Rico with a way forward on restructuring its debt.<\/div>\n<\/div>\n
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As it turns out, on the day the House announced that it planned on taking up the Puerto Rico bill next week,\u00a0a 17 member audit commission found that two debt issues worth $4.4 billion of the $72 billion in debt outstanding were unconstitutional.<\/strong><\/p>\n

Said otherwise, the government may now just declare the bonds invalid.\u00a0<\/strong><\/u>It’s a handy development for governor Padilla, since the two debt issues were expected to default on July 1. Also helpful is the fact that it would be one less item for Padilla to worry about since he proposed a budget for 2016-2017 that provides for only $209 million of the $1.4 billion in current debt service cost.<\/p>\n

As MarketWatch\u00a0explains<\/a><\/p>\n

An audit report published on Thursday suggests that debt-laden Puerto Rico may be able to void some of its borrowing\u00a0because politicians exceeded constitutional debt limits and their own authority<\/strong>.<\/em><\/p>\n

The report, shared with MarketWatch, states that\u00a0some of Puerto Rico\u2019s debt may have been issued illegally, allowing the government to potentially declare the bonds invalid and courts to then decide that creditors\u2019 claims are unenforceable<\/strong>. The scope of the audit report, issued by the island\u2019s Public Credit Comprehensive Audit Commission, covers the two most recent full-faith-and-credit debt issues of the commonwealth:\u00a0Puerto Rico\u2019s 2014 $3.5 billion general-obligation bond offering and a $900 million issuance in 2015 of Tax Refund Anticipation Notes to a syndicate of banks led by J.P Morgan.<\/strong><\/em><\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Bondholders Stunned As Puerto Rico Finds $4.4 Billion In Outstanding Debt “Unconstitutional” After Puerto Rico\u00a0defaulted on its $422 million debt payment in May, governor Padilla begged congress to step in and help out, which happened shortly thereafter when a\u00a0House committee cleared legislation\u00a0that provided Puerto Rico with a way forward on restructuring its debt. As it […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13415,195,13992,200,13993,3824,4318],"class_list":["post-20900","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bondholders","tag-debt","tag-debt-payments","tag-default","tag-padilla","tag-puerto-rico","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20900"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20900\/revisions"}],"predecessor-version":[{"id":20901,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20900\/revisions\/20901"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}