Puerto Rico's oversight board presents its plan for recovery at Distressed Investing 2019

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In 2016 the United States enacted the PROMESA statute to allow territories to declare bankruptcy. That prompted the creation of the Financial Oversight and Management Board for Puerto Rico (FOMB), which in September announced a restructuring that cut the island’s debts by 33% from $129 billion to $86 billion. In Puerto Rico’s complicated maze of debt structures, the oversight board’s plan reflects a compromise between retirees, bond holders, and the public employees’ union.

One likely controversial issue is the latest bonds, which the FOMB argues are illegal because they took the island over its legal debt limit. The issue is still litigated. If bondholders win, they would get 64 cents on the dollar. If they lose (a court decision that their bonds were illegal), they could get nothing.

At Distressed Investing 2019, FOMB presents its plan for Puerto Rico’s recovery.

Natalie Jaresko led the effort as Executive Director of the Financial Oversight and Management Board for Puerto Rico. As Ukraine’s finance minister, Natalie led that country’s restructuring in the wake of the 2014 revolution, securing a $40 billion loan from the IMF. Natalie set the goal of reducing Puerto Rico’s debts to a sustainable level for its economy to support, which she argues requires pensioners and retirees having money to spend.

Sean Gumbs is a Senior Managing Director who leads FTI Consulting’s Municipal Finance service. He has advised Jefferson County, AL; bondholders of Santa Rosa Bay Bridge Authority near Pensacola, FL; the city of Philadelphia; and the California State Parks. Sean represents Puerto Rico’s committee of retirees.

Matthew Rodrigue is a Managing Director of Miller Buckfire, representing Puerto Rico’s bondholders. In the past he has represented 888 Holdings, General Growth Properties, LodgeNet Interactive Corporation, Mervyns Department Stores, Caesars Entertainment, Coldwater Creek, FairPoint Communications and more.

Brad Setser, a senior fellow at the Council on Foreign Relations, is the skeptic on the panel who will respectfully challenge the other three to defend the decisions they made in restructuring Puerto Rico’s debt.

The panel will be moderated by Andrew Scurria, a reporter who covers financial distress and debt restructuring for The Wall Street Journal and WSJ Pro Bankruptcy, with an emphasis on energy companies, retailers and municipalities.

Make sure you’re in the room when the professionals who designed Puerto Rico’s debt restructuring present their plan for recovery.

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