Marrero Touts Puerto Rico’s Advances at J.P. Morgan Global High-Yield Conference
Puerto Rico Fiscal Agency and Financial Advisory Authority, or AAFAF, Executive Director Omar Marrero told participants this week at the J.P. Morgan 2022 Global High Yield & Leveraged Finance Conference that Puerto Rico is “closing the bankruptcy chapter and ushering in a new era of fiscal sustainability, economic growth and better opportunities.” The AAFAF director’s appearance at the conference, the second year in a row, comes ahead of the March 15 deadline for the commonwealth plan of adjustment to go effective.
Marrero briefed investors on the latest developments in Puerto Rico’s debt restructuring process and on improvements in the business environment on the island, AAFAF said in a press release issued today.
On Monday, Feb. 28, the first day of the conference, Marrero held several meetings with senior executives from large U.S. investment funds and private equity firms. The AAFAF chief highlighted the “excellent market reception” of the restructured bonds of the Government Development Bank and COFINA as well as improvements in the management of federal funds that are being deployed to finance the recovery and reconstruction of Puerto Rico, according to the press release.
Marrero’s detailed presentation to the conference centered on developments with the commonwealth plan of adjustment and also provided an overview of completed debt restructurings and the major debt restructurings still in progress. He reiterated an aim to complete both the Highways and Transportation Authority, or HTA, and Puerto Rico Electric Power Authority, or PREPA, restructurings this year.
AAFAF’s PREPA presentation notes that the PROMESA oversight board and the commonwealth entered into the PREPA restructuring support agreement, or RSA, in May 2019 but have “faced a lack of legislative support in order to finalize the agreement and move forward with the restructuring process.”
The presentation does not mention Gov. Pedro Pierluisi’s call last week for the oversight board to revisit the agreement because of changed circumstances since the accord was reached. On Monday, Feb. 28, Pierluisi reiterated that the RSA should be renegotiated and called for better economic terms and the elimination of a “transition charge” at the heart of the deal that would pay for the restructured debt.
“After the Commonwealth’s POA, the priority is the PREPA RSA and negotiating an agreement that will allow PREPA to exit Title III prior to the end of calendar year 2022,” the AAFAF presentation states. “It is imperative to exit bankruptcy at the end of calendar year 2022 to comply with the On-Island renewable energy goals, along with focusing on economic development after exiting the last outstanding Title III case.”
Marrero asserted that the commonwealth has put its finances in order as it completes the “largest and most complex debt restructuring in the U.S. municipal market.”
“With the plan confirmation, we are ending our fiscal crisis with a plan that is fair to all stakeholders and sustainable for Puerto Rico. Now our focus is on improving government services, prudent financial management, regaining access to the capital markets and economic development,” the presentation states.