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February 5, 2019

Judge approves Puerto Rico debt restructuring deal

  • The island is mired in a 12-year-old recession and struggling to recover from Hurricane Maria as the government tries to restructure a portion of its more than $70 billion public debt load.
  • By DANICA COTO
    Associated Press

    A federal bankruptcy judge approved a major debt restructuring plan for Puerto Rico on Monday in the first deal of its kind for the U.S. territory since the island's government declared nearly four years ago that it was unable to repay its public debt.

    The agreement involves more than $17 billion worth of government bonds backed by a sales-and-use tax, with officials saying it will help the government save an average of $456 million a year in debt service. The deal allows Puerto Rico to cut its sales-tax-backed debt by 32 percent but requires the government to pay $32 billion in the next 40 years as part of the restructuring.


     
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