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Wednesday, September 9, 2015

PR Government Releases Fiscal Plan

Caribbean Business


Delivered just over two months after Gov. Alejandro García Padilla tasked
the Economic Recovery Working Group with it, the Puerto Rico government
publicly released Wednesday the Fiscal & Economic Growth Plan (FEGP) —
an encompassing blueprint for the government to follow during the next five
years in a bid to bridge a $28 billion cumulative financing gap.

Besides a long and diverse list of measures aimed at jumpstarting the econo-
my, increasing revenue and further cutting government spending, the plan al-
so calls for the reprofiling, or restructuring, of about $47 billion of the island’s
$73 billion debt load, as the island will not be able to meet debt-service requi-
rements as scheduled, even after full implementation of the plan.

Debt-restructuring efforts would follow the Puerto Rico Electric Power Au-
thority (Prepa) example, and affect various issuers, including the common-
wealth’s general-obligation (GO) and Sales Tax Financing Corp. (Cofina by
its Spanish acronym) bonds...[CONTINUE READING]

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