Puerto Rico Expected To Float “Superbond” Offer In Private Meeting Today

Value Walk

A meeting between Puerto Rico’s Government Development Bank and bond holder financial advisers will likely float the proposal for a “superbond,” a UN debt expert source closely following the matter tells ValueWalk. However, key players, including well-known “vulture hedge fund” Aurelius Capital, are not anticipated to attend as individual creditors were not invited and the meeting contents are designated to remain confidential.

Puerto Rico “superbond” idea to be floated, but investors want details on haircut

At the Friday meeting in New York, representatives of the Puerto Rican government are expected to float the idea of a “superbond” that will consolidate all the island’s $72 billion in debt into one bond. Bond investors would be asked to swap their existing bonds for the “superbond” and in doing so they could be accepting a reduction in the amount they are owed and extending the repayment period so the region can regain its economic footing, according to Eric LeCompte, executive director of Jubliee USA, a bi-partisian debt relief advocacy group who is closely following the matter.

The “superbond” proposal to solve Puerto Rico’s problems was floated by the U.S. Treasury department in October and was dismissed as “half baked,” with commentators at the time advising that participants “forget” the idea and rather move to a solution involving bankruptcy.

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