Just a few days before the vast majority of Puerto Rico bond payments are due, the rhetoric coming from the island has turned decidedly negative, based on a governor-commissioned study of the financial situation. The report, by former International Monetary Fund officials, has no legal authority and cannot compel any action, good or bad, for bondholders. Additionally, because Puerto Rico is not a sovereign, it cannot ask the IMF for assistance.
OppenheimerFunds Rochester and other creditors have offered Governor Alejandro Garcia Padilla and Puerto Rico numerous creative and viable solutions to the current fiscal situation facing the island’s public power authority. We strongly believe the Commonwealth has the ability to provide essential services to its citizens, grow the economy and repay what bondholders are due. We are disheartened that Governor Padilla, in a public forum, has called for negotiations with other creditors, representing and including the millions of individual Americans that hold Puerto Rico municipal bonds. We expect Puerto Rico to act within the tenets of the law, including the Commonwealth’s Constitution, and are ready to defend the previously agreed to terms in each and every bond indenture.
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SOURCE: OppenheimerFunds Blog – Read entire story here.
