(Reuters) – Puerto Rico’s financial oversight board late on Friday approved a plan to wind down the island’s Government Development Bank (GDB), bringing the defunct fiscal agent a step closer to settling more than $5 billion in debt.
The oversight board, appointed by federal lawmakers to steer Puerto Rico through a historic crisis, said in a joint statement with government leaders it endorsed the plan to restructure GDB debts under Title VI of PROMESA, a federal Puerto Rico rescue law passed by the U.S. Congress last year.
GDB - Officials - Deal - GDB - Assets
GDB officials lauded the deal, which will split GDB’s assets among depositors and lenders in an effort to avoid a protracted bankruptcy.
“Today’s development represents an important step forward in the restructuring of GDB,” Christian Sobrino, the bank’s president, said in the joint statement. “It also represents significant progress in Puerto Rico’s economic recovery.”
Agent - Puerto - Rico - Charge - Deposits
Once the primary fiscal agent for Puerto Rico, in charge of holding deposits from government agencies and municipalities, GDB has been a shell entity since the U.S. territory’s former governor declared a state of emergency in April 2016.
Its wind-down could...
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