HedgePapers No. 61: THE GOLDEN REVOLVING DOOR: How A Planned Debt Restructuring Agreement Benefits The Bankers — and Could Block Puerto Rico From Holding Them Legally Accountable
Spanish version of the report.
An agreement nearing approval as part of Puerto Rico’s debt restructuring process could block many forms of legal accountability for a key set of government officials and bankers that oversaw the creation of the debt – and stick credit unions and municipalities with the tab.
The restructuring agreement for $4 billion in Government Development Bank (GDB) debt was negotiated quietly and behind closed doors, as part of PROMESA’s out-of-court Title VI process, by conflicted players – revolving door figures who were previously officials at the GDB, have played some oversight role with respect to the debt, and/or have close ties to financial institutions that have profited from debt issuances over the years.
The agreement is now in the voting stage, and will need to secure votes in favor from two-thirds of GDB creditors.... Read More