SAN JUAN, Puerto Rico – Puerto Rico is pushing for a voluntary debt exchange deal with creditors as it struggles to manage a $72 billion public debt load that the governor has said is unpayable and needs restructuring.
Top officials in the U.S. territory's government expected to meet Friday with creditors' advisers to present the proposal.
Gov. Alejandro Garcia Padilla declined to give details of the proposed deal. He reiterated a call for U.S. Congress to provide Puerto Rico with a debt-restructuring mechanism so it can avoid lawsuits as it tries to emerge from a nearly decade-long economic stagnation.
"Despite our good-faith efforts to find a common solution, it will be very hard to reach an agreement with multiple issuers without having access to a legal framework to implement the restructuring of our unsustainable debt," he said in a statement.
The meeting with the advisers comes just days before members of the U.S. House Subcommittee on Indian, Insular and Alaska Native Affairs hold a hearing to talk about creating an authority to oversee Puerto Rico's finances. Republicans have been pushing for a federal fiscal control board, but some Puerto Rico officials have rejected the idea of the federal government having such oversight.
Pedro Pierluisi, Puerto Rico's representative in Congress, has said he expects a legislative package to be unveiled after Tuesday's hearing.
President Barack Obama stressed the need for a comprehensive restructuring authority during a speech late Thursday at a U.S. House Democratic Issues Conference.
"(It) costs taxpayers nothing and will help more Americans regain control of their own economic security," he said.
Puerto Rico's government recently defaulted on $37 million in interest on bonds and has said it does not have the money to make upcoming payments, including a $400 million due in May. Three bond insurers have already filed lawsuits against the U.S. territory after it diverted funds to meet certain bond payments.