Puerto Rico News Digest For August 7, 2015

MEDICARE ADVANTAGE HEADED FOR COLLAPSE

From The San Juan Daily Star:

The crisis in the Medicare Advantage program is beginning to be felt.
The president of the Physicians-Surgeons Association, Víctor Ramos,
said Wednesday hundreds of Medicare Advantage patients are finding
out that doctors are not accepting their health insurance plans and  are
being forced to pay for services out of their own pockets or refrain from
seeking medical treatment. Ramos said that Medicare Advantage has
cancelled health insurance contracts with over 600 doctors without ade-
quate justification. The situation is also causing a mass exodus of doc-
tors from the island as they face a reduction in the number of patients
seeking their services.

PR TO HOST LATIN AMERICA TRADE EVENT

From Caribbean Business:

The Latin American Business Council (CEAL by its Spanish acronym) is
slated to hold its "Latin America and International Trade" meeting Aug.
13-14 at the Condado Vanderbilt Hotel in San Juan. Business leaders, o-
fficials and experts in international commerce will attend the event to de-
bate and contribute to Latin American trade. Among the issues to be dis-
cussed will be Latin America's participation in international trade, new
U.S. developments, the state of global entrepreneurship, internationali-
zation and new business opportunities with Cuba.

BONDHOLDERS DEMAND PFC PAYMENT

From News Is My Business:

OppenheimerFunds and Franklin Advisers, which represent Public Finance
Corporation bondholders, sent a letter to Puerto Rico government officials
demanding that they take “all necessary actions” to make the $58 million pay-
ment missed this week. In the letter, the entities said the nonpayment came
“just a few short weeks” after Gov. Alejandro García-Padilla and Senate Pre-
sident Eduardo Bhatia said the government intended to negotiate with bond-
holders. “Now, just a few short weeks later and before any negotiations have
taken place, negotiations in which we have been willing to participate, the go-
vernment of Puerto Rico has decided not to pay the Public Finance Corpora-
tion bond debt service payment,” the letter stated.

SALSA ICON LEAVITT DIES AGED 66

From Latin Times:

Puerto Rico and music lovers around the world are mourning the death of
Raphy Leavitt, composer and founder of the salsa orquesta La Selecta.  The
iconic musician, who was born on September 17th, 1948 in San Juan, Puerto
Rico, passed away on August 5th at his home in Miami, Fla. two days after
undergoing hip surgery. He was 66 years old. "I stay with the memories of a
great human being, a father my whole life and a colleague forever," said band
member Sammy Marrero in an interview with Wapa.

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Three Day Rationing For Carraízo Starts Next Week

Reservoir levels for today. Carraízo is on the left.

SAN JUAN (PRM) -- Amid Puerto Rico's worst drought in decades, the
water levels at the Carraízo  reservoir -- which serves a large part  of the
San Juan metro area -- continue to fall to dangerously low levels. This has
prompted the island's water utility, Autoridad de Acueductos y Alcantari-
llados, to extend the water rationing plan that Carraízo users have been
under for several weeks. According to AAA management, the Carraízo
reservoir level is now so low, that it may soon be rendered inoperative.

Starting next Wednesday, August 13th, running water will be shut off
for three days rather than the current two days, and will then be on for
one day. Of the two rationing zones the Carraízo service area is divi-
ded into, Zone B will be the first to be subjected to the three-day ratio-
ning, with Zone A following suit two days later. A map of the Carraí-
zo zones can be found below. No significant rainfall over the area is
expected for the time being, although the government announced yes-
terday that they will soon begin a program of cloud seeding, in hopes
of generating rain over the dwindling reservoirs of Carraízo, La Plata
and Cidra.

Puerto Rico News Digest For August 5, 2015

2-DAY RATIONING COMES TO LA PLATA

As announced several days ago by the island's water utility, AAA,  cus-
tomers served by the La Plata reservoir will start to see 48-hour water
rationing starting today. This means that running water will be on for
one day, off for two days, then back on. The affected towns are: Baya-
món, Cataño, Dorado, Toa Alta, Toa Baja and Vega Alta. La Plata's
water levels have been steadily decreasing all summer, as the worst
drought the Caribbean area has seen in decades continues to prevent
significant rainfall over the eastern two thirds of Puerto Rico. The Na-
tional Weather Service has declared this past July to be the fourth driest
month in the island's history. La Plata's level stands this morning at 35.
74 meters, falling 13 centimeters from yesterday.

EARTHQUAKES FELT ON NORTH COAST

Two earthquakes were felt on Puerto Rico's north coast early this mor-
ning. The first one was registered at 3:29 AM, and had a magnitude of
4.5. The quake was centered at latitude 19.5208 degrees north and lon-
gitude 66.3658 and had a depth of 72 kilometeres. The tremor was felt
in several municipalities, according to El Vocero. The second quake
happened at 5:23 AM, and had a magnitude of 3.4, with the epicenter
76 miles north of the city of Dorado. No tsunami warning or watches
have been issued as a result of the quakes.

PIERLUISI CONDEMNS GOVERNOR OVER DEFAULT

From The San Juan Daily Star:

New Progressive Party (NPP) President Pedro Pierluisi on Monday lambas-
ted the administration of Gov. Alejandro García Padilla for causing the first
non-payment of the government’s financial obligations in the island’s his-
tory after missing a $58 million payment on Public Finance Corp. (PFC)
debt, due this past weekend. “Today is a grim day in the history of  Puerto
Rico. For the fi rst time in its history the government of Puerto Rico failed
to pay its obligations. The consequences of this irresponsible act will be
hard on all Puerto Ricans,” Pierluisi said.

LUXURY HOTEL BEING BUILT IN TORO VERDE

From Caribbean Business:

Jorge Jorge, the CEO of Toro Verde, a nature adventure tour company, laid
the first stone in the construction of a new luxury hotel, Nayara Toro Ver-
de, in Orocovis, which is projected to inject some $6 million into the lo-
cal economy. "Thanks to all of your support, and to always thinking about
being innovative, pioneering and at the forefront of ecotourism, we have
joined forces with Nayara Hotel, which is a five-star hotel of internatio-
nal recognition that is highly experienced in giving guests unforgettable
experiences, to build a hotel in the mountains of Toro Verde, which will
bring another perspective on luxury tourism and ecotourism to Puerto Rico,"
the businessman said.

PR FACES LITIGIATION OVER DEBT

From Reuters:

GDB President's Statement On Default

August 3, 2015


STATEMENT FROM GOVERNMENT DEVELOPMENT BANK
PRESIDENT MELBA ACOSTA FEBO ON THE SERVICE OF
PUBLIC FINANCE CORPORATION (PFC) BONDS

San Juan, P.R. – Today, Government Development Bank for Puerto Rico
(“GDB”) President Melba Acosta Febo issued the following statement on
the service of Public Finance Corporation (PFC) bonds:

“Due to the lack of appropriated funds for this fiscal year the entirety of the
PFC payment was not made today. This was a decision that reflects the se-
rious concerns about the Commonwealth’s liquidity in combination with the
balance of obligations to our creditors and the equally important obligations
to the people of Puerto Rico to ensure the essential services they deserve
are maintained.

“PFC did make a partial payment of interest in respect of its outstanding
bonds.The partial payment was made from funds remaining from prior le-
gislative appropriations in respect of the outstanding promissory notes se-
curing the PFC bonds. In accordance with the terms of these bonds, which
stipulate that these obligations are payable solely from funds specifically
appropriated by the Legislature, PFC applied these funds—totaling appro-
ximately $628,000—to the August 1 payment.”

Puerto Rico has triggered the biggest municipal default in US history

Ambrose Evans-Pritchard

Business Insider / The Telegraph

Puerto Rico has triggered the biggest municipal default in US history, ris-
king years of bitter legal warfare with creditors and an austerity "death spi-
ral" with echoes of Greece. The island Commonwealth finally ran out of
money on Monday after a desperate effort to stay afloat, and missed a final
deadline for a $58 million payment - handing over just $628,000. It implies
a sweeping default on much of its $72 billion debt burden, equal to 100pc
of Puerto Rico’s gross national product (GNP) and more than five times the
debt ratio of California or Texas.

The Commonwealth is now in legal limbo, facing a well-organized pack of
hedge funds that scooped up the debt at distressed levels and appears deter-
mined to extract maximum value in the courts...[CONTINUE READING]

Puerto Rico News Digest For August 3, 2015

PR PUBLIC FINANCE CORP DEFAULTS 

From Bloomberg:

A Puerto Rico agency is poised to default Monday, initiating a clash with cre-
ditors as the struggling commonwealth seeks to renegotiate its $72 billion debt
load. The government doesn’t have the money for the $58 million of principal
and interest that was due Aug. 1 on Public Finance Corp. bonds, Victor Suarez,
the chief of staff for Governor Alejandro Garcia Padilla, said during a press con-
ference July 31 in San Juan. The financing corporation’s obligation is part of $
597 million of debt-service payments that the common-wealth and its agencies
owe this month. It would mark the first payment default by a Puerto Rico entity.

O'MALLEY SPEAKS ON PR CRISIS

From Caribbean Business:

Former Maryland Gov. Martin O'Malley, a Democratic presidential candidate,
arrived Friday night in Puerto Rico, making it his fourth time on the island in the
past two years[...]In Puerto Rico, he intends to reiterate his position regarding the
island’s exclusion from the federal bankruptcy code’s chapter 9 protections and
local Medicare payment rates. The presidential candidate reportedly supports a-
llowing Puerto Rico to declare bankruptcy and backs the island’s call for federal
healthcare reimbursement-rate parity with the U.S. mainland. O'Malley told the
Associated Press that Puerto Rico should receive the same benefits as the U.S.
He said that Wall Street, forces on the mainland and a Republican Congress were
treating the island unfairly.

TOWNS IN EXTREME DROUGHT TRIPLE

From The San Juan Daily Star:

Natural and Environmental Resources (DNER) Secretary Carmen Guerrero Pé-
rez said Thursday the United States Drought Monitor increased the number of
island municipalities under the extreme drought classification to 20 as 2.5 mi-
llion people in 74 towns are living under diff erent drought categories...The 20
Puerto Rico municipalities under extreme drought are now Arroyo, Caguas, Ca-
nóvanas, Carolina, Cayey, Cidra, Fajardo, Guayama, Guarabo, Juncos, Las Pie-
dras, Luquillo, Maunabo, Naguabo, Patillas, San Lorenzo, Río Grande, Salinas,
Trujillo Alto and  Yabucoa.

WATER RESERVOIR LEVELS FOR TODAY

From AAA. Click graph to enlarge.

UPDATE: 48-hour rationing will start for customers of the La Plata reservoir
starting this coming Wednesday, August 5th.