Friday, May 27

Puerto Rico faces the largest municipal debt restructuring in US history after the Justice approves its plan


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  • BBC News World

Protest in Los Angeles

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Caption,

Puerto Rico racked up unsustainable levels of debt in the years leading up to 2017, when it filed for bankruptcy

Years of debt accumulation, devastating hurricanes, political turmoil and a long pandemic are some of the challenges that Puerto Rico has faced while seeking approval from the US Justice to restructure its debt.

Federal Judge Laura Taylor Swain’s decision to give the green light to the island’s plan to emerge from bankruptcy ends almost five years of litigation and will facilitate its return to the capital markets.

Puerto Rico accumulated unsustainable levels of debt in the years leading up to 2017, when it declared bankruptcy and began the process to restructure its multimillion-dollar debt of more than $70 billion.

At that time, the island was mired in a serious economic crisis. It had a poverty rate of 45%, unemployment of 12% – which was twice the average for the United States -, and its population emigrated massively.


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