By Nicole Acevedo and Associated Press
SAN JUAN, Puerto Rico – The Federal Authority for Control (FOMBPR), which oversees the finances of Puerto Rico , asks a court that invalidates more than US $ 6 billion in US debt, a move that would hit bondholders.
The Board said late Monday that debts include all bonds issued in 201
If a federal judge agrees to the allegations, bondholders would lose their investments.
"This is really a milestone," Puerto Rican economist José Caraballo said Tuesday to The Associated Press. "It may be the best step of the board in the two years of its existence."
It is unclear when a judge would decide on the board's application, but Caraballo said he lends the government's bargaining power, noting that Detroit had taken a similar step during the report's bankruptcy.
Caraballo said that those who bought public bonds during that time would accept a large cut rather than risk total loss. Most of them are hedge funds and not individual investors.
a very speculative issue, "he said. They ran the risk of lending money to a government they knew was in trouble and ignored the constitutional margin. "
The board's findings came after the Board called for an independent investigation. In September 2017, all debts issued by Puerto Rico and their connection with the island's current financial crisis began.
According to the report issued by the company that helped the Board of Directors in its investment in August 2018 By May 3, 2017, Puerto Rico had $ 74 billion in debt and unfunded pension obligations of $ 49 billion
a Puerto Rican economy was catastrophic in exposing this debt – that was a financial disaster and ultimately a humanitarian catastrophe. The tribute demanded by the Puerto Rican people raises an urgent question: how did it happen?
Advocacy groups such as Hedge Clippers were very vocal about the need to answer such a question.
"The Fiscal Control Board finally acknowledges what we've been saying for years that debt are illegal and should not be paid, "the group said in a press release regarding the Board's final step." The Board has the power to stop this abuse by allowing a citizen to democratically review all debts and then return it to the courts "Demanding the Repeal of All Illegal Debt."
No government officials were accused of having issued debts beyond the limits set out in the Puerto Rican constitution, which was now defunct Government Development Bank, which issued loans and Was overseeing its operations in March due to a 12-year recession
The bonds were issued in 2012 during the State Administration of Governor Luis Fortuño and under the administration of Governor Alejandro García Padilla. 19659005] Puerto Rico is attempting to restructure a portion of its public debt of more than $ 70 billion, and a federal judge is expected to do so within days of a two-day hearing on an important debt rescheduling case on sales-taxed debt securities.
The Government of Puerto Rico announced in June 2015 that it could not pay back. These debts were declared insolvent in May 2017.
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