Puerto Rico’s Debt Rescue Plan Called Into Question
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Thousands of public sector workers demonstrated on Friday against an austerity plan to help pull Puerto Rico out of a debt crisis, saying the private sector should take more of the pain. CreditAlvin Baez/Reuters
A week after the governor of Puerto Rico laid out a plan for attacking the island’s heavy debt, analysts are beginning to publicly question the proposals and even the financial assumptions on which they are based.
The doubts suggest that Gov. Alejandro García Padilla’s strategy to persuade bondholders and other investors to voluntarily help the island restructure the debt — and take losses on their investments as a result — is a long shot.
One credit analyst, Ryan Brady of Morgan Stanley, said it appeared that the planners had greatly overstated Puerto Rico’s financial needs over the next five years. As a result, he said in a private presentation to clients, Puerto Rico was hoping to get $14 billion in concessions from its creditors, when in fact it might need as little as $5.7 billion…
Puerto Rico’s Debt Rescue Plan Called Into Question
