A federal judge signed off Tuesday on Puerto Rico’s debt adjustment plan intended to revitalize the U.S. territory’s economy.
The Plan of Adjustment, approved by U.S. District Judge Laura Taylor Swain, will reduce Puerto Rico’s debt by 80% and save the island more than $50 million in debt service payments, the Financial Oversight and Management Board for Puerto Rico said in a statement.
“Today begins a new chapter in Puerto Rico’s history. Today, Puerto Rico can start to move on from fiscal instability and insolvency into a future of opportunity and growth,” the board said.
The Congressional Research Service said in May 2021 that the plan may be the largest restructuring of public debt in U.S. history.
BRIDGE-SIZED ASTEROID PASSING BY EARTH ON TUESDAY
Puerto Rico’s public debt surpassed $70 billion last year, according to the CRS report. The debt has grown in recent years due to Puerto Rico defaulting on its debt payments and is compounded by multiple natural disasters, government mismanagement, population decline, and the coronavirus pandemic, per the Council on Foreign Relations.
In 2015, then-Puerto Rico Gov. Alejandro García Padilla told the New York Times that the territory’s debt was “not payable.”
Today begins a new chapter in PR’s history. Judge Swain of the @USCourtsPRD confirmed the #PlanOfAdjustment. #FOMBPR owes Judge Swain a debt of gratitude for her tireless leadership, her exemplary diligence, and her dedication to a fair solution to PR’s debt crisis.
— Financial Oversight & Mgmt Board for Puerto Rico (@FOMBPR) January 18, 2022
Today, with the approval of the Debt Restructuring Plan of Adjustment, Puerto Rico takes one of the most important steps to succeed economically and do away with one of the stark indicators of our colonial status, the Financial Oversight and Management Board for Puerto Rico, pic.twitter.com/mBriCnNQE2
— Jenniffer González (@RepJenniffer) January 18, 2022
Jenniffer Gonzalez-Colon, the resident commissioner of Puerto Rico and the territory’s representative in Congress, wrote on Twitter that the plan was “one of the most important steps to succeed economically.”
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“Restructuring the debt, however, is only one step towards Puerto Rico’s recovery. Puerto Rico needs to achieve fiscal responsibility to ensure long-term stability and growth,” the board wrote.
