Eric LeCompte, Executive Director of Jubilee USA was recently featured in Value Walk speaking on Puerto Rico's debt crisis. Read excerpt below and follow link to full article.
Expert Who Helped Craft PROMESA Act: President Trump Is Right, Bondholders Could Lose Everything
By: Mark Melin
"LeCompte pointed out that the super bankruptcy process includes a key provision that pins debt payments to the economic ability of a sovereign region to pay. The provisions of the PROMESA act are more sweeping in this regard than credit leniency afforded to states or other sovereign governments, he said.
'There has been an acknowledgment from island’s oversight board that hurricane relief takes priority,' LeCompte said, noting that money earmarked to pay bondholders is currently being diverted to hurricane relief. There is a significant likelihood that a large portion of the debt will be forgiven, he said. The issue is entirely up to the bankruptcy judge. 'Bankruptcy judge has tremendous authority to cut and cancel the debt,' with one 'best case scenario' for bondholders being that they may receive restructured bonds that are linked to economic growth, a notion that LeCompte championed in other debt crises such as Argentina and Greece. The concept for the super bankruptcy process is based, in large part, on the 1953 London Agreement, which forgave German war debt and allowed the nation to experience tremendous economic growth."
Read more here.