Puerto Rico’s revised fiscal plan shows surplus; bonds rally
(Reporting By Luis Valentin Ortiz in San Juan; Editing by Daniel Bases and Cynthia Osterman)
SAN JUAN, Oct 22 (Reuters) – Puerto Rico’s federally appointed financial oversight board issued a new version of the U.S. commonwealth’s five-year fiscal plan on Monday.
“A revised fiscal (plan) that shows more money for creditors and recognizes Puerto Rico’s ability to pay – that is driving GOs higher… There is still a lot of execution risk as the fiscal plan relies on some assumptions and policies being put in place,” said Shaun Burgess, a portfolio manager at Cumberland Advisors in Sarasota, Florida.
“This was definitely a surprise and it is an admission that they can cover debt service and have a surplus. Definitely hurts the commonwealth narrative that they are broke when you see they can pay debt service and have a surplus of many millions of dollars,” he added.
Puerto Rico filed on Friday its first plan of adjustment, which would tackle roughly $16 billion in COFINA debt. Final court approval was expected in early 2019.
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