Government

Creditors Owed by Puerto Rico Agree to Reduce $18.8 Billion Debt, But Puerto Rico Has Rejected Deal Because of Cuts to Pension System

SAN JUAN, Puerto Rico (AP) — Puerto Rico’s governor announced Tuesday that a federal control board reached a key deal that would reduce the U.S. territory’s overall debt by nearly 80%, but that his administration is rejecting it amid concerns about cuts to the island’s crumbling public pension system. The impasse between the governor and a board that oversees Puerto Rico’s finances threatens to throw into limbo attempts to end a bankruptcy-like process for a government that six years ago declared unpayable its more than $70 billion public debt load. The deal was reached with creditors who hold general obligation bonds and Public Building Authority bonds sold by Puerto Rico’s government and would resolve $35 billion worth of debt and non-debt claims, according to the board. It also would reduce debt held by those creditors from $18.8 billion to $7.4 billion, a 61% reduction, and would provide them with $7.4 billion in bonds and $7 billion in cash, among other things. The board said t...