---
Approximately 85% of the public debt in Puerto Rico has undergone restructuring, resolving around $65 billion in claims and achieving a total debt reduction of 63% as reported by government officials on Wednesday, as of August 31 this year.
This week, Puerto Rico Secretary of State and Executive Director of the Fiscal Agency & Financial Advisory Authority (AAFAF) Omar Marrero Díaz traveled to New York City with other high-ranking government officials to present the latest update on the island’s fiscal and economic situation to major credit rating agencies, specifically S&P Global Ratings, Moody’s, and Fitch Ratings.
Prior to the bankruptcy in 2016, Puerto Rico was encumbered with approximately $72 billion in debt and over $55 billion in unfunded pension obligations.
“This initiative serves a dual purpose: to facilitate a future return to the bond market and to provide a clear overview of fiscal achievements and the actions the new administration must undertake to sustain the recovery process,” stated Marrero Díaz.
Accompanying him in the delegation were Treasury Secretary Nelson Pérez Méndez, Office of Management and Budget (OMB) Director Juan Carlos Blanco Urrutia, and Central Office for Recovery, Reconstruction and Resilience (COR3) Executive Director Manuel Laboy Rivera.
The delegation’s presentation to the executives from the credit rating agencies highlighted various aspects, beginning with the island’s economic and fiscal performance over recent years. Notably, the unemployment rate has remained below 6.5% for 32 consecutive months, marking a significant decrease from the previous decades when it exceeded 10%.
“Additionally, we highlighted significant investments made in Puerto Rico by multinational corporations such as Sartorius ($33 million), Baxter ($30 million), and CooperVision ($500 million), among others,” Marrero Díaz emphasized.
Focusing on the fiscal outlook of the U.S. territory, the key points included General Fund revenues, which have experienced a compound annual growth rate of 10% over the past five years. Furthermore, the outcomes from the Earned Income Tax Credit (EITC) program have surpassed expectations.
Recent updates were also shared regarding the funds provided to Puerto Rico by the Federal Emergency Management Agency (FEMA), from which approximately $23.2 billion has been distributed out of a total of $50.5 billion allocated.
In terms of energy infrastructure, there are currently 191 projects aimed at enhancing the electrical grid, with around $6.1 billion allocated by FEMA. This constitutes about 60% of the total funds (around $10.5 billion) designated to the Puerto Rico Electric Power Authority for these improvements.
The delegation also reported on the latest movements in public-private partnership transactions, a sector in which Puerto Rico has taken the lead recently, alongside new practices in transparency and effective fiscal management within the government.
“Last but not least, we provided insights into the ongoing process of restructuring Puerto Rico’s debt, which is nearing completion, with the exception of the Electric Power Authority, which is still involved in mediation before the Title III Court,” said Marrero Díaz.
