Puerto Rico News Digest For December 31, 2015

GOVERNOR: PR WILL DEFAULT ON $37 MILLION

From News Is My Business:

"The government of Puerto Rico will make most of its $1 billion debt pay-
ment due Jan. 1, defaulting only on some $37 million of the amount, Gov.
García-Padilla said Wednesday. The government will pay some $434 mi-
llion after deductions for capitalized interest and certain federal subsidies
in debt issued or guaranteed by the Commonwealth, also known as Gene-
ral Obligation bonds. To cover the payment, the Commonwealth will use
$174 million in amounts collected via the enactment of clawback provisi-
ons that redirect revenue earmarked for one debt to cover another expense..."

PDP LEADERSHIP INITIATES TRANSITION

From Caribbean Business:

"Former Secretary of State and Popular Democratic Party (PDP) candidate
for governor, David Bernier, officially took office as party president Wed-
nesday afternoon. Bernier met with the president of his transition commi-
ttee, Rep. Jesús Santa, to outline a transition plan prior to the first meeting
of the PDP’s Governing Board, which will take place on January 7th, 2016
...The official transition will take place on January 7th and will culminate
with a public event dedicated to the people..."

PR DRIVER'S LICENCES STILL VALID FOR TRAVEL

From The San Juan Daily Star:


"Department of Transportation and Public Works Secretary Miguel Torres
urged Puerto Rico residents on Tuesday to remain calm as he assured them
that island driver’s licenses remain an accepted form of identification to tra-
vel to the U.S. mainland. “It is a reality that the current license will undergo
changes so they meet Department of Homeland Security standards, but those
changes will take place in the first half of 2016,” he said. Torres’ remarks
came after the U.S. Transportation Security Administration (TSA) announ-
ced it may stop accepting certain state driver’s licenses, including Puerto Ri-
co’s, as identification when clearing airport security as early as Jan. 10..."

Puerto Rico News Digest For December 29, 2015

COP KILLS THREE AT PONCE POLICE HQ

From Reuters:

"A Puerto Rico police officer shot dead three colleagues on Monday and
was in critical condition after being shot himself in the police department
building in the city of Ponce, authorities said. The suspect, Guarionex Can-
delario Rivera, was on duty when he walked into Commander Frank Roman
Rodriguez's office to speak with him, but the senior officer was unable to do
so immediately and the situation escalated, Puerto Rico police spokesman
Axel Valencia said. Candelario Rivera eventually shot Roman Rodriguez,
Lieutenant Luz Soto Segarra and agent Rosario Hernandez de Hoyos, he
added. Further details were still being investigated..."

MORE PR CHILDREN RUNNING AWAY 

From The San Juan Star:

"A commonwealth Family Department study shows that more younger chil-
dren are running away from home in Puerto Rico, and experts say the find-
ing is alarming. The most recent cases took place when two boys, ages 11
and 9, ran away, apparently together, from a foster care home in Hatillo.
They have not been found. The study shows that regardless of whether the
children are running away from the home of their biological parents or from
a foster home, the reality is that they are running away at very young ages,
younger than in prior years..."

PDP LEGISLATOR NOT TO RUN FOR REELECTION

From Caribbean Business:

"Angered at how some of his fellow Popular Democratic Party (PDP) mem-
bers manage government and political issues, Rep. José Báez has decided not
to run for reelection and thus return to his private practice as an attorney be-
cause he has no say in the party. Currently, the president of Precinct 4 in San
Juan, Báez said he is retiring because there is serious tension within the PDP
with a sector that, little by little, has broken everything in front of everybody
and no one is saying anything for fear of losing the election..."

PREPA, CREDITORS AGREE TO RESTRUCTURING

From News Is My Business:

"The Puerto Rico Electric Power Authority announced early Thursday that it
has reached an agreement with creditors holding approximately 70 percent
of its financial debt on a plan to execute a restructuring that, among other
things, will reduce the utility’s principal debt burden of more than $600 mi-
llion. As part of the lengthy negotiations that took about 15 months, PREPA
amended its previously announced restructuring support agreement, or RSA,
to include an agreement with monoline insurers Assured Guaranty Corp. and
National Public Finance Guarantee Corp., as well as the Ad Hoc Group of PRE-
PA bondholders — comprising traditional municipal bond investors and hedge
funds — its fuel line lenders and the Government Development Bank for Puer-
to Rico..."

Governor Creates Debt Work Group

From News Is My Business:

Puerto Rico Gov. Alejandro García-Padilla announced Monday a multi-pronged
plan to address the island’s fiscal crisis to work with creditors on restructuring
what he described as the “unpayable” $73 billion debt.

During a televised speech, García-Padilla said a group — comprised of Chief
of  Staff Víctor Suárez, Government Development Bank President Melba A-
costa, Justice Secretary César Miranda, Senate President Eduardo Bhatia and
House Speaker Jaime Perelló — will be tasked with striking up “conversations
to achieve, with transparency and consensus, the restructuring of our public
debt.”

“The ultimate goal is a negotiated agreement with bondholders for a deferrment
of payments on the debt for a number of years so that the money can be invested
here in Puerto Rico,” he said...[CONTINUE READING]

New VAT System Too Complex

Editorial

Caribbean Business

Puerto Rico Treasury Secretary Juan Zaragoza has his hands full these days
as he is trying mightily to explain the reasoning behind Gov. Alejandro
García Padilla's new tax reform, which calls for a transformation to a value-
added tax (VAT, or IVA by its Spanish acronym) system. Zaragoza's job
couldn't be more difficult as the measure is drawing the broadest opposition
that this newspaper has witnessed in a long time.

Important mayors belonging to the incumbent governor's Popular Democra-
tic Party (PDP), such as those of San Juan, Caguas and Mayagüez, as well as
former PDP Govs. Rafael Hernández Colón and Aníbal Acevedo Vilá have
come out against the VAT proposal; their voices of dissent are joined by
leaders from the opposition...[CONTINUE READING]