Puerto Rico Default Plan May Spread Beyond Utility - Businessweek: “I’ve lost all confidence in the collective leadership of Puerto Rico,” Larkin said | Ley de "quiebra criolla” demuestra “doble vara” del Gobierno | The clear path to default - ENDia: The new law that will allow public corporations to renegotiate their obligations is "a clear path" to the default, analysts said today | Puerto Rican drug trafficking as the U.S misdirects its focus on the War on Drugs: the territory is ominously proving to be a principal actor in the illegal trafficking of drugs from Latin America into the U.S. mainland, indicating a noticeable failure of the national government to manage its own proprietary

» Puerto Rico Default Plan May Spread Beyond Utility - Businessweek
30/06/14 11:14 from puerto rican community in new york - Google News
La prensa Puerto Rico Default Plan May Spread Beyond Utility Businessweek Yet the competitive advantage afforded by the tax-free bonds made it easy for Puerto Rico and its agencies to sell debt to plug budget deficits and cover operating...

» Ley de "quiebra criolla” demuestra “doble vara” del Gobierno
30/06/14 12:43 from Metro - Últimas noticias
Mientras a los bonistas les garantizan el pago de su deuda, a los empleados públicos les “anulan”...

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From The Major News Sources

» Clear path of default - The New Day
30/06/14 17:14 from Mike Nova's Shared Newslinks
mikenova shared this story . The new law will allow public corporations renegotiate their obligations is "a clear path" to the default, analysts said today Moody's Investors Service, Emily Raimes, Rick Donner and Ted Hampton. According t...

» No surprise lawsuits bankruptcy law Creole
30/06/14 17:12 from Mike Nova's Shared Newslinks
mikenova shared this story . The secretary of the Department of Justice Cesar Miranda said these actions were foreseeable The Justice Department expected demand that was already filed challenging the controversial law Creole bankruptcy, ...

» Act "Creole bankruptcy" proves "double standard" of the government
30/06/14 17:08 from Mike Nova's Shared Newslinks
mikenova shared this story from Metro - Últimas noticias. The president of the Union of the Electricity Industry and Irrigation (UTIER) of the Electric Power Authority (PREPA), Angel Figueroa Jaramillo, said today that the law of "Creole...

» Police are on the streets to guide you on your lost rights
30/06/14 17:01 from Mike Nova's Shared Newslinks
mikenova shared this story . Gathered near the Supreme Court to denounce the abuses of government against the Uniformed A group of police officers from different parts of the island today participated in a demonstration against governmen...

» Governor offers explanations Puerto Ricans on bankruptcy law
30/06/14 16:54 from Mike Nova's Shared Newslinks
mikenova shared this story from Periódico El Expresso de Puerto Rico. San Juan (Reuters) - The governor of Puerto Rico, Alejandro García Padilla, offered explanations to the public about the law just approved for public companies to...

» PR unemployment dips, but jobs drop
30/06/14 16:48 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. PR unemployment dips, but jobs drop Puerto Rico’s unemployment rate fell while payroll jobs dropped sharply last mon ... Badillo Saatchi & Saatchi scores at Cannes Badillo Saatchi &...

» NY Fed chief Dudley in PR this week
30/06/14 16:47 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. NY Fed chief Dudley in PR this week Federal Reserve Bank of New York President William Dudley is scheduled for a two ... Report: Mayagüez Resort casino closing Issued: June 23, 2014 The...

» UN decolonization panel: PR’s 2012 plebiscite rejected commonwealth
30/06/14 16:47 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. UN decolonization panel: PR’s 2012 plebiscite rejected commonwealth The United Nations Special Committee on Decolonization is again calling the Unit ... Elizabeth Arden closing PR affil...

» NY Fed chief Dudley: PR fiscal fixes doable, but you have to do
30/06/14 16:47 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. NY Fed chief Dudley: PR fiscal fixes doable, but you have to do it — now Federal Reserve Bank of New York President William Dudley voiced optimism Tuesda ... Lawmakers confirmed Maite O...

» Unions stage walkout over austerity law
30/06/14 16:46 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Unions stage walkout over austerity law Issued: June 25, 2014 Unionized workers from the island government’s utilities and other public c ... Beauty products company Elizabeth Arden is ...

» Fortaleza bill would allow PR public corporations to declare bankruptcy
30/06/14 16:46 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Fortaleza bill would allow PR public corporations to declare bankruptcy Gov. Alejandro García Padilla announced Wednesday the filing of legislation that ... BUENOS AIRES, Argentina — Th...

» The administration of Gov. Alejandro García Padilla filed legislation
30/06/14 16:46 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. The administration of Gov. Alejandro García Padilla filed legislation Wednesday ... Fortaleza bill would allow PR public corporations to restructure debt The U.S. House of Representativ...

» Spying drop-off in Iraq preceded fresh insurgency
30/06/14 16:46 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Spying drop-off in Iraq preceded fresh insurgency Issued: June 25, 2014 WASHINGTON — CIA officers in Iraq have been largely hunkered down in their heavily fortified Baghdad compound sin...

» Moody’s cuts Prepa deeper into junk
30/06/14 16:45 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Moody’s cuts Prepa deeper into junk Moody’s Investors Service has downgraded the Puerto Rico Electric Power Authorit ... Broken leg ends Carlos Correa’s year HOUSTON -- Carlos Correa, H...

» Moody’s, Fitch cut Prepa deeper into junk; point to restructuring
30/06/14 16:45 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Moody’s, Fitch cut Prepa deeper into junk; point to restructuring legislation Moody’s Investors Service and Fitch Ratings both downgraded the Puerto Rico Elec ... $200M FY15 budget gap ...

» Moody’s downgrades Prasa, Highways because of debt restructuring
30/06/14 16:45 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Moody’s downgrades Prasa, Highways because of debt restructuring measure Moody’s Investors Service has downgraded two of Puerto Rico’s largest public cor ... Issued: June 27, 2014 Puert...

» Index: PR economy still shrinking
30/06/14 16:44 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Index: PR economy still shrinking Puerto Rico’s economy is still shrinking amid an ongoing recession dating back t ... Veteran analyst: ‘Real damage’ from Recovery Act will trail PR for...

» Governor signs debt restructuring law
30/06/14 16:44 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Governor signs debt restructuring law Gov. Alejandro García Padilla signed legislation Saturday that will let ailing p ... Issued: June 27, 2014 Standard & Poor’s, Moody’s Investors...

» Governor signs debt restructuring law; S&P puts PR on downgrade
30/06/14 16:44 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Governor signs debt restructuring law; S&P puts PR on downgrade watch Progreso Económico: Time for a deep look at government salary scales An evaluation of Puerto Rico’s finances th...

» Firms sue PR govt over Recovery Act
30/06/14 16:43 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business. Firms sue PR govt over Recovery Act A pair of investment funds have filed suit in federal court against a new Puerto ... Issued: June 29, 2014 An evaluation of Puerto Rico’s finances th...

» Caribbean Business - More Local News - Page2RSS
30/06/14 16:39 from Mike Nova's Shared Newslinks
mikenova shared this story from Caribbean Business - More Local News. 30 Jun ' 05:56 Moody’s, Fitch cut Prepa deeper into junk; point to restructuring legislation Issued: June 26, 2014 Moody’s Investors Service and Fitch Rating...

» To protect the ESA of the total insolvency
30/06/14 16:35 from Mike Nova's Shared Newslinks
mikenova shared this story . June 30, 2014 Recently rocked by new credit and liquidity problems even for the purchase of fuel degradation, the Electric Power Authority (PREPA) should become the first government instrumentality to assume ...

» Puerto Rico's debt restructuring law raises default risk - Moody's: Thomson Reuters Business News
30/06/14 16:33 from Mike Nova's Shared Newslinks
mikenova shared this story . June 30 (Reuters) - Puerto Rico's new debt restructuring law will increase the default risk for public corporations, Moody's Investors Service said on Monday. The law "signals the Commonwealth's diminished wi...

» Puerto Rico’s Default Plan May Spread Pain Beyond Utility
30/06/14 16:29 from Mike Nova's Shared Newslinks
mikenova shared this story from Businessweek.com -- Top News. The U.S. municipal-bond market begins the week wondering whether the Puerto Rico Electric Power Authority, the commonwealth’s sole provider of electricity, will pay bond...

» 7 Best Places to Visit in Old San Juan Puerto Rico
30/06/14 16:27 from Mike Nova's Shared Newslinks
mikenova shared this story from Squidoo: 7 Best Places to Visit in Old San Juan Puerto Rico. My first stop was at El Morro (long name, Castillo de San Felipe del Morro) , a more than 400 year old fortress that was built by the Spanish, l...

» U.S. bond funds sue Puerto Rico, worried about bankruptcy threat
30/06/14 16:24 from Mike Nova's Shared Newslinks
mikenova shared this story . (Reuters) - U.S. mutual funds holding about $1.7 billion in Puerto Rico debt have sued the cash-strapped commonwealth, accusing it of passing a law modeled after the U.S. bankruptcy code that could undermine ...

» S&P puts Puerto Rico aqueduct and sewer under review for potential downgrade
30/06/14 16:23 from Mike Nova's Shared Newslinks
mikenova shared this story . WASHINGTON, June 30 Mon Jun 30, 2014 11:36am EDT WASHINGTON, June 30 (Reuters) - Standard & Poor's Ratings Service said on Monday it was putting Puerto Rico Aqueduct & Sewer Authority under review for...

» Puerto Rican drug trafficking as the U.S misdirects its focus on the War on Drugs
30/06/14 16:21 from Mike Nova's Shared Newslinks
mikenova shared this story from Council on Hemispheric Affairs. By: Clare Hogan, Research Associate at the Council on Hemispheric Affairs Though never having been fully embraced as a state, Puerto Rico’s auspicious location in the ...

Clear path of default - The New Day

Monday June 30th, 2014 at 4:14 PM

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The new law will allow public corporations renegotiate their obligations is "a clear path" to the default, analysts said today Moody's Investors Service, Emily Raimes, Rick Donner and Ted Hampton.

According to a review of about two pages, the new statute appears to be "imminently applicable to the Power Authority" corporation facing serious demands of short-term liquidity.

"The law puts subscribers, pensioners and public employees rather than investors, who own about $ 20,000 million in debt of public corporations," says Moody's noting "the diminished willingness and ability of the central government" to assist corporations public.

According to Moody's, both the Highways and Transportation and the Authority of Aqueducts and Sewers (AAA) have a high level of debt and need additional capital to finance its capital improvements, but in the aggregate is less likely that both utilities decide to invoke the provisions of the statute that makes possible two mechanisms for renegotiation of obligations.

Moody's indicated, even if to the financial capacity of the central government is so limited that assist corporations could even jeopardize the very liquidity of the central government.

Since last April, El Nuevo Día revealed the inability of the Government and various public corporations to honor their obligations, when he revealed the recruitment of at least five firms renegotiation and reorganization of companies in financial trouble.

Also, nearly a month ago, The New Day revealed the serious cash that has the ESA, because they do not have enough to pay two credit lines that have served as money to cover its operations.

According to the most recent actions of Moody's, major utilities in Puerto Rico, and all speculative grade, are under review, so that they could receive additional impairments. This, in turn, implies a further decline in the price of such bonds, increasing the chance of losses need to preserve capital or monetize their investments.

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No surprise lawsuits bankruptcy law Creole

Monday June 30th, 2014 at 4:12 PM

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The secretary of the Department of Justice Cesar Miranda said these actions were foreseeable

The Justice Department expected demand that was already filed challenging the controversial law Creole bankruptcy, reported the Justice Secretary Cesar Miranda.

"It was expected. We anticipated that situations like this would happen. Every time you take a course of this nature someone will react. So we are not surprised in the least. Arguments were also anticipatable are outlining. So it's no surprise, "he said in a radio interview (NotiUno).

Law Enforcement and the Debt Recovery of the Public Corporation was filed last Wednesday by Gov. Alejandro García Padilla and approved the same day by the Senate and House of Representatives. However, it was not until last Saturday that the governor signed his name and became law.

After learning of the act, the Franklin Funds and Oppenheimer Rochester Funds franchises had the same Saturday at the Federal Court the first lawsuit to allege that only the U.S. Congress could pass legislation to make possible bankruptcy in the Island

According to Miranda, even the governor García Padilla, the Justice Department, the Government Development Bank (GDB) and the Electric Power Authority (PREPA), entities against whom the claim is filed, have not been deployed.

The secretary explained that before the present law, the argument presented in these bondholders demand on the only interference of Congress to legislate on bankruptcy was analyzed.

"That's studied before approval of this law. Judgment on all that happened determination. It was concluded that there is effectively a ban Puerto Rico to be eligible under the Bankruptcy Act. But Puerto Rico, in the exercise of their sovereignty in areas that have not been occupied by federal law, as it can legislate, "he said.

He alleged that the administration of García Padilla has been "more cautious than Detroit" to take steps to restructure public corporations facing financial problems, such as the ESA.

"Puerto Rico has every right to defend themselves, to protect their interests. This is a fully necessary law, "said Miranda, to clarify that" there has not been said to be unable to pay is to be paid under certain conditions. "

Moreover, the attorney accused of causing houses accrediting bonds of public corporations and the government have fallen.

"The bonds of Puerto Rico have been declining in the world market. Possibly, these applicants should throw more blame accrediting agencies that the Government of Puerto Rico, for the reason that the bonds have been falling is because simply the accrediting agencies that the rating of Puerto Rico issued the judgment in relation to the ability of Puerto Rico. If these trials are negative, then obviously the bonds will go down. The descent to the adoption of this law (bankruptcy Creole) there must be, "he said.

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Act "Creole bankruptcy" proves "double standard" of the government

Monday June 30th, 2014 at 4:08 PM

Metro - Últimas Noticias

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The president of the Union of the Electricity Industry and Irrigation (UTIER) of the Electric Power Authority (PREPA), Angel Figueroa Jaramillo, said today that the law of "Creole bankruptcy" or Act Compliance for the Debt and Recovery of the Public Corporations demonstrates the "double standard" of the Government, since on the one hand, guarantees the payment of debts to bondholders and the other, reducing the benefits of public workers.

"The bondholders are going to collect your money, now or later, one hundred percent. What is being discussed is how they are going to pay. However, workers' rights are not guaranteed, these can be overridden, may be rejected, can vary. And go back and repeat, to see how once again the rod is used differently, "the union leader in a radio interview (NotiUno).

Thus, the president of the UTIER reacted to the demands presented by two franchises ESA bondholders who oppose the "Creole bankruptcy law" because they believe this power to create a bankruptcy belongs to Congress and do not want to be changing the way they would repay their investment.

"In this process the Bondholders obviously do not want a restructuring that is going to make a payment in a manner other than as provided, and analyzed the mechanism of judicial proceedings to make such claim. We the workers when we do the same claim, we can not remove our rights, that we pay for what is already agreed, also how to analyze this process is totally different, "said the union leader.

Although ESA has not availed to Law Enforcement debts, it is speculated that the legislation was created to measure this public corporation, which could run out of cash flow in the coming days by paying $ 150 million after the expiry of a credit line with Citibank, said Figueroa Jaramillo.

"Having to make that extra payment, not established in the immediate foreground, obviously is no liquidity and no flow to meet are your other responsibilities," said the president of the UTIER, who stressed that this problem worsens with millions in debt the government itself with ESA.

Although the leader of the UTIER he stated that there is a supermarket in Bayamón to be about $ 12 million in electricity and still have not done the outage, declined to say what business is about. Nor could he say when they make another demonstration against Law 66 of Fiscal and Operational Sustainability.

Police are on the streets to guide you on your lost rights

Monday June 30th, 2014 at 4:01 PM

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Gathered near the Supreme Court to denounce the abuses of government against the Uniformed

A group of police officers from different parts of the island today participated in a demonstration against government policies and actions that allege violate the rights and benefits of the Uniform.

"They are creating a new generation of poor," said the sergeant Mara Rodríguez, who along with 15 other agents traveled by bus from Villalba to participate in the protest, most of them with a blue shirt that read "Enough, the Police respects. "

Today's activity consisted of a loose-leaf distribution in Puerta de Tierra, up to the Supreme Court, to guide the public on what claims the Uniformed said Nydia Ramos, spokesman for the group organizing the protest "Policemen claim rights with respect. "

"We want the public to know why the cops are pulling into the street. Most citizens think we are demanding salary increases, and that's not reality. It is for us to return the rights to be taken away" Ramos said.

Among those who reported suffering abuse at the hands of government and listed in the loose-leaf citizens received some honking in solidarity-listed they are owed money, the decline in the Christmas bonus, and changes in the retirement system mainly for them unlisted Social Security, among others.

"It's an outrage," said Kelvin Hernandez, Arecibo, who claims they owe $ 49,000 on various items from his retirement in June last year, and who criticized it as part of changes to the laws Retirement was forced to retire with 28 years of service receive only 46% of their salary.

The activity is given 24 hours in a march organized by Police Coordinated Action (PAC), an organization that unites multiple law enforcement groups, which is scheduled for tomorrow at 10:00 am, departing from The Escambrón to La Fortaleza.

Several participants of the activity today clarified that they also support the march tomorrow.

"What we want is that the government respect our rights," said retired Lt. Gabriel Medal, a native of Rincon, and who said that he was shot twice in the line of duty.

Group signs "Cops claim rights with respect"

1) Changes in retirement leave them a dignified retirement

2) Imposition of compulsory insurance

3) Losing the benefit of sick days

4) Reduction in the Christmas Bonus

5) Do not you have paid to retired cops

6) Failure to pay overtime

7) Failure to pay the Autoexpreso

8) Lack of a fair pay rise

* Source: Cops claim rights with respect

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Governor offers explanations Puerto Ricans on bankruptcy law

Monday June 30th, 2014 at 3:54 PM

Periódico El Expresso De Puerto Rico

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San Juan (Reuters) - The governor of Puerto Rico, Alejandro García Padilla, offered explanations to the public about the law just approved for public companies to file for bankruptcy and published a column in which he said that it was necessary to ensure basic public services.

"Public corporations have to be self-sufficient. Its structure is similar to private, but public because its end is the common good and its only shareholders are Puerto Ricans, "argues in a column published in the most widely read of the island, El Nuevo Dia newspaper and on the web La Fortaleza.

However, he explains that some of these public companies are no longer the "example of efficiency and quality" were for many years, in which "covered their expenses with revenue generating."

"Irresponsibly, some governments began to allow expenditures exceed revenues; tolerate surrender to the increasingly high bills customers and, even so, the checkbook will fit in with loans, "he says.

As an example, notes that between 2009 and 2012 the Highway Authority borrowed more than 2,200 million dollars without knowing what was going to pay.

"This course of action is unfair to all Puerto Ricans, undermines our chances of economic development," says exactly the day that is one year and a half as governor.

He adds that "this approach is totally unacceptable to me as Governor and to all who share the responsibility you placed in the government."

The biggest problem is the companies that provide the services of water, light and road, which together build up a debt of 21,000 million, almost 30% of the total.

PR unemployment dips, but jobs drop

Monday June 30th, 2014 at 3:48 PM

Caribbean Business

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PR unemployment dips, but jobs drop Puerto Rico’s unemployment rate fell while payroll jobs dropped sharply last mon ...

Badillo Saatchi & Saatchi scores at Cannes Badillo Saatchi & Saatchi has picked up a bronze award as Puerto Rico-b ... Issued: June 20, 2014 SANTO DOMINGO, Dominican Republic — U.S. Vice President Joe Biden met with ... Issued: June 20, 2014 A campaign is taking shape to have Puerto Rican baseball legend Roberto Clemente recognized as a Catholic saint. The U.S. Department of Housing & Urban Development has assigned more than $900,000 in federal funds to the Puerto Rico government and no ... Taubman selling 7 stateside malls

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NY Fed chief Dudley in PR this week

Monday June 30th, 2014 at 3:47 PM

Caribbean Business

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NY Fed chief Dudley in PR this week Federal Reserve Bank of New York President William Dudley is scheduled for a two ...

Report: Mayagüez Resort casino closing Issued: June 23, 2014 The Mayagüez Resort & Casino is reportedly planning to shut down its ca ... Issued: June 23, 2014 Puerto Rico is posting record numbers of leatherback turtle nests along the ... PR hotel, student win InterContinental culinary contest The InterContinental San Juan and culinary student Victor Bonano Ortiz have ... Puerto Rico’s House of Representatives has approved a $9.56 billion budget for fiscal 2015, $75 million less than the $9.64 billion spending ... Issued: June 22, 2014 The Puerto Rico Supreme Court has denied Doral Financial Corp.’s petition that it step into the dispute between the San Juan-based financial ... Major League Baseball and the players’ union said Thursday they are teaming to launch a new summer league in Puerto Rico to give island teen ... Obama encouraging family-friendly work policies Issued: June 23, 2014 WASHINGTON — President Barack Obama is hosting a daylong summit Monday to encourage more employers to adopt family-friendly policies, even t ... Court raises bar for securities class action cases Issued: June 23, 2014 WASHINGTON — The Supreme Court is making it tougher for investors to join together to sue corporations for securities fraud. Justices uphold broad use of anti-bank fraud law Issued: June 23, 2014 WASHINGTON — The Supreme Court on Monday unanimously upheld the broad application of a federal anti-bank fraud law. UN experts to check possible Columbus ship off Haiti Issued: June 23, 2014 PORT-AU-PRINCE, Haiti — A team of experts from UNESCO will examine a site off northern Haiti that an explorer believes may be the wreckage o ... US, French bank close to deal on $9 billion fine Issued: June 23, 2014 WASHINGTON — The U.S. government and French bank BNP Paribas are close to a settlement over alleged sanctions violations that would require ... Environment, economy linked at new UN assembly Issued: June 23, 2014 NAIROBI, Kenya — The first-ever United Nations Environmental Assembly opened in Kenya on Monday, as more than 150 high-level delegations beg ... Jamaica to encourage bamboo industry Issued: June 23, 2014 KINGSTON, Jamaica — Jamaica hopes to kick-start a local bamboo industry as the tropical plant becomes more common in flooring, furniture and ...

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UN decolonization panel: PR’s 2012 plebiscite rejected commonwealth

Monday June 30th, 2014 at 3:47 PM

Caribbean Business

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UN decolonization panel: PR’s 2012 plebiscite rejected commonwealth The United Nations Special Committee on Decolonization is again calling the Unit ...

Elizabeth Arden closing PR affiliate Issued: June 24, 2014 Beauty products company Elizabeth Arden is closing its Puerto Rico affiliat ... ASES issues new RFP for Mi Salud Issued: June 24, 2014 The Health Insurance Administration (ASES by its Spanish acronym) has launc ... PR eyes public corporations options Issued: June 24, 2014 Puerto Rican political leaders are apparently discussing draft legislation ... Puerto Rico’s unemployment rate fell while payroll jobs dropped sharply last month, the U.S. Labor Department’s Bureau of Labor Statistics r ... The FBI has arrested a Puerto Rican man for allegedly aiming a laser pointer at a police helicopter. The Puerto Rico government’s Medical Center and adjacent Cardiovascular Center remained in operation Monday despite a 24-hour strike launche ... Pierluisi pitches PR statehood at UN Issued: June 23, 2014 The United Nations Special Committee on Decolonization again passed a resolution on Puerto Rico’s political status at its annual session Mon ... US: Looking at all options in immigration surge Issued: June 24, 2014 WASHINGTON — Homeland Security Secretary Jeh Johnson says the Obama administration is looking at every possible option to help respond to a ... Abe's grand plan to revive Japan's economic might Issued: June 24, 2014 TOKYO — Prime Minister Shinzo Abe announced a slew of measures Tuesday aimed at restoring Japan's global competitiveness. Past governmen ...

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NY Fed chief Dudley: PR fiscal fixes doable, but you have to do

Monday June 30th, 2014 at 3:47 PM

Caribbean Business

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NY Fed chief Dudley: PR fiscal fixes doable, but you have to do it — now Federal Reserve Bank of New York President William Dudley voiced optimism Tuesda ...

Lawmakers confirmed Maite Oronoz Rodríguez as an associate justice of the Puerto Rico Supreme Court on Monday. Company successfully tests space-tourism balloon ALBUQUERQUE, N.M. — An Arizona company says it has successfully completed the first small-scale test flight of a high-altitude balloon and c ... Issued: June 24, 2014 BUENOS AIRES, Argentina — The winners of a decade-long debt battle asked a U.S. judge on Tuesday to deny Argentina's request for more ne ...

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Unions stage walkout over austerity law

Monday June 30th, 2014 at 3:46 PM

Caribbean Business

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Unions stage walkout over austerity law Issued: June 25, 2014 Unionized workers from the island government’s utilities and other public c ... Beauty products company Elizabeth Arden is closing its Puerto Rico affiliate as part of a broader restructuring and cost savings program. Th ... Officials: Sanctions on Russia could be delayed Issued: June 25, 2014 WASHINGTON — Sanctions aimed at key economic sectors in Russia because of its threatening moves in Ukraine might be delayed because of posit ... Beyond cure? European courts rule on euthanasia Issued: June 25, 2014 PARIS — A European court ordered French doctors to continue treatment for a comatose patient while Britain's Supreme Court on Wednesday ...

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Fortaleza bill would allow PR public corporations to declare bankruptcy

Monday June 30th, 2014 at 3:46 PM

Caribbean Business

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Fortaleza bill would allow PR public corporations to declare bankruptcy Gov. Alejandro García Padilla announced Wednesday the filing of legislation that ... BUENOS AIRES, Argentina — The winners of a decade-long debt battle asked a U.S. ...

Issued: June 25, 2014 The United Nations Special Committee on Decolonization is again calling the ... Puerto Rican Monica Puig was knocked out of Wimbledon with a first-round loss in London on Tuesday. Issued: June 25, 2014 NEW YORK — Climate change is likely to exact enormous costs on U.S. regional economies in the form of lost property, reduced industrial outp ... UN help sought to restore Detroit water service Issued: June 25, 2014 DETROIT — Welfare rights groups want a United Nations agency to help Detroiters whose water service has been cut off due to unpaid bills. US economy shrank at steep 2.9% rate in Q1 Issued: June 25, 2014 WASHINGTON — The U.S. economy shrank at a steep annual rate of 2.9 percent in the January-March quarter as a harsh winter contributed to the ... Rangel celebrates though primary too close to call Issued: June 25, 2014 NEW YORK — U.S. Rep. Charles Rangel, the 84-year-old "Lion of Harlem," took the stage on his final primary night before a victory ... Etihad agrees in principle to buy Alitalia stake Issued: June 25, 2014 DUBAI, United Arab Emirates — Fast-growing Gulf airline Etihad Airways said Wednesday it had reached a deal in principle to buy a 49 percent ...

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The administration of Gov. Alejandro García Padilla filed legislation

Monday June 30th, 2014 at 3:46 PM

Caribbean Business

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The administration of Gov. Alejandro García Padilla filed legislation Wednesday ... Fortaleza bill would allow PR public corporations to restructure debt

The U.S. House of Representatives has approved the Fiscal Year 2015 Defense ... FBI: PR man aims laser at helicopter The FBI has arrested a Puerto Rican man for allegedly aiming a laser pointer at a police helicopter. Ruling could help US become major oil exporter NEW YORK — Companies are taking advantage of new ways to export oil from the U.S. despite government restrictions, and in the process helpin ... Rangel holds off challenge to win primary in NY NEW YORK — U.S. Rep. Charles Rangel has won the closely contested Democratic primary in New York's 13th Congressional District as he see ... States confront worries about fracking, quakes AZLE, Texas — Earthquakes used to be almost unheard of on the vast stretches of prairie that unfold across Texas, Kansas and Oklahoma. US: China's behavior offshore hurts its standing Issued: June 25, 2014 WASHINGTON — China's coercive efforts to enforce its territorial claims in disputed waters are not just raising tensions but damaging it ... Issued: June 25, 2014 CURITIBA, Brazil — Luis Suarez faces the prospect of a big financial hit following his alleged biting of Italian defender Giorgio Chiellini, ... Issued: June 25, 2014 BUENOS AIRES, Argentina — The winners of a decade-long debt battle asked a U.S. judge on Tuesday to deny Argentina's request for more ne ... Bolivia rebels at rightist timepieces, flips clock Issued: June 25, 2014 LA PAZ, Bolivia — Bolivia's leftist government is turning back the clock. Or, more precisely, turning it backward.

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Spying drop-off in Iraq preceded fresh insurgency

Monday June 30th, 2014 at 3:46 PM

Caribbean Business

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Spying drop-off in Iraq preceded fresh insurgency Issued: June 25, 2014 WASHINGTON — CIA officers in Iraq have been largely hunkered down in their heavily fortified Baghdad compound since U.S. troops left the cou ... At UN, Argentina remains defiant on debt Issued: June 25, 2014 UNITED NATIONS — Argentina is willing to negotiate to avoid a catastrophic default but is waiting for a U.S. judge to approve the country ...

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Moody’s cuts Prepa deeper into junk

Monday June 30th, 2014 at 3:45 PM

Caribbean Business

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Moody’s cuts Prepa deeper into junk Moody’s Investors Service has downgraded the Puerto Rico Electric Power Authorit ...

Broken leg ends Carlos Correa’s year HOUSTON -- Carlos Correa, Houston’s top prospect and the No. 1 overall pick ... Ferrer leaving UBS amid reshuffling Miguel Ferrer’s long run at UBS has come to an end, the company said Thursd ... PR gets $6.2M grant for job training Mayaguez Resort & Casino for sale Issued: June 26, 2014 The 144-room Mayaguez Resort & Casino is for sale. PR Trade & Export Co. gets $90,000 SBA grant Issued: June 26, 2014 The Puerto Rico Trade & Export Co. is in lie for more than $90,000 as part of U.S. Small Business Administration (SBA) grants totaling $ ... Issued: June 26, 2014 Resident Commissioner Pedro Pierluisi is leveling sharp criticism at legislation pushed by Gov. Alejandro García Padilla that will allow pub ... Issued: June 26, 2014 The economic crisis and the lack of good jobs in Puerto Rico is convincing thousands of college graduates with professional experience to le ... Issued: June 26, 2014 Renewable energy proponents are criticizing the proposed fiscal 2015 general fund budget, which they say cuts incentives available to popula ... The United Nations Special Committee on Decolonization is again calling the United States to expedite a process that would allow Puerto Rica ... Argentina's request to delay payments is denied Issued: June 26, 2014 NEW YORK — A judge Thursday denied Argentina’s request to extend deadlines to repay a $1.65 billion debt to U.S. hedge funds despite warning ... Analysis: Iraq producing unusual Mideast dynamic Issued: June 26, 2014 WASHINGTON — Strange bedfellows, indeed. Vatican: Many Catholics ignore teachings on sex Issued: June 26, 2014 VATICAN CITY — The Vatican conceded Thursday that most Catholics reject its teachings on sex and contraception as intrusive and irrelevant a ... Argentina has processed June 30 debt payment Issued: June 26, 2014 BUENOS AIRES, Argentina — Argentina's government said on Thursday that it has begun to process the next payment it owes on its restructu ...

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Moody’s, Fitch cut Prepa deeper into junk; point to restructuring

Monday June 30th, 2014 at 3:45 PM

Caribbean Business

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Moody’s, Fitch cut Prepa deeper into junk; point to restructuring legislation Moody’s Investors Service and Fitch Ratings both downgraded the Puerto Rico Elec ...

$200M FY15 budget gap as clock ticks Puerto Rico lawmakers are still scrambling to close a $200 million gap in t ... Issued: June 26, 2014 Medal of Honor recipient: This belongs to comrades Issued: June 26, 2014 CONCORD, N.H. — Ryan Pitts will wear the nation's highest award for combat valor, but the humble and soft-spoken Medal of Honor recipien ... Obama aims to put human face on economic struggles Issued: June 26, 2014 MINNEAPOLIS — President Barack Obama said Thursday that Washington needs to stop "playing to the most fringe elements of politics" ...

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Moody’s downgrades Prasa, Highways because of debt restructuring

Monday June 30th, 2014 at 3:45 PM

Caribbean Business

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Moody’s downgrades Prasa, Highways because of debt restructuring measure Moody’s Investors Service has downgraded two of Puerto Rico’s largest public cor ...

Issued: June 27, 2014 Puerto Rico lawmakers are still scrambling to close a $200 million gap in t ... Miguel Ferrer’s long run at UBS is coming to an end, the company said Thursday. Golden Gate Bridge suicide barrier funding OK'd Issued: June 27, 2014 SAN FRANCISCO — The Golden Gate Bridge moved a big step closer to getting a suicide barrier after bridge officials on Friday approved a $76 ... Court ruling comes as Obama's use of power tested Issued: June 27, 2014 WASHINGTON — Before a unanimous Supreme Court weighed in, the White House had brushed off claims that President Barack Obama was exceeding h ... Ukraine signs historic EU pact, snubbing Russia Issued: June 27, 2014 BRUSSELS — Over Russia's objections, Ukraine's new president on Friday signed a free-trade deal binding his country more closely to ... Haiti ex-president Leslie Manigat has died Issued: June 27, 2014 PORT-AU-PRINCE, Haiti — Leslie Manigat, a prominent figure in the Haitian political establishment whose term as president was cut short by a ... Cyprus seen potential new gas conduit for Europe Issued: June 27, 2014 NICOSIA, Cyprus — Cyprus' president says other European Union countries recognize the Mediterranean island nation's potential to bec ... Official: Armed drones guard US interests in Iraq Issued: June 27, 2014 WASHINGTON — The U.S. has started flying armed drones over Baghdad to protect U.S. civilians and military forces in the Iraqi capital, a Pen ... FIFA, players’ union agree Suárez needs treatment Issued: June 27, 2014 RIO DE JANEIRO — The players’ union and football’s governing body agree on one thing in the wake of the heavy ban imposed on Luis Suárez for ... Carmakers to build $1.4 billion Mexico plant Issued: June 27, 2014 MEXICO CITY — Automakers Daimler and Renault-Nissan say they will build a $1.36 billion plant to manufacture Infiniti and Mercedes-Benz bran ...

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Index: PR economy still shrinking

Monday June 30th, 2014 at 3:44 PM

Caribbean Business

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Index: PR economy still shrinking Puerto Rico’s economy is still shrinking amid an ongoing recession dating back t ... Veteran analyst: ‘Real damage’ from Recovery Act will trail PR for years Puerto Rico’s move to allow its public corporations to undertake a bankruptcy-li ...

Governor: Up to 6,000 jobs lost since 2013 Issued: June 28, 2014 Gov. Alejandro García Padilla is estimating Puerto Rico job losses at betwe ... Issued: June 28, 2014 Puerto Rico water utility officials are keeping a close eye on reservoir le ... Issued: June 28, 2014 Gov. Alejandro García Padilla announced Wednesday the filing of legislation ... Federal Reserve Bank of New York President William Dudley voiced optimism Tuesday that Puerto Rico can overcome the deep fiscal and economic ... Popular, Inc. has agreed to sell an aggregate of $450 million in notes as it moves closer to exiting the U.S. Treasury Department’s Troubled ... The administration of Gov. Alejandro García Padilla filed legislation Wednesday that would clear the way for a new $60 million bond issue. China says it will never seek regional hegemony Issued: June 28, 2014 BEIJING — Chinese President Xi Jinping said Saturday his country will never seek hegemony no matter how strong it becomes, even as his neigh ...

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Governor signs debt restructuring law

Monday June 30th, 2014 at 3:44 PM

Caribbean Business

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Governor signs debt restructuring law Gov. Alejandro García Padilla signed legislation Saturday that will let ailing p ...

Issued: June 27, 2014 Standard & Poor’s, Moody’s Investors Service and Fitch Ratings have all ...

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Governor signs debt restructuring law; S&P puts PR on downgrade

Monday June 30th, 2014 at 3:44 PM

Caribbean Business

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Governor signs debt restructuring law; S&P puts PR on downgrade watch Progreso Económico: Time for a deep look at government salary scales An evaluation of Puerto Rico’s finances that brings employee salaries in line wi ...

Issued: June 29, 2014 Moody’s Investors Service has downgraded two of Puerto Rico’s largest publi ... Puerto Rico lawmakers are still scrambling to close a $200 million gap in the fiscal 2015 budget that kicks in July 1.

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Firms sue PR govt over Recovery Act

Monday June 30th, 2014 at 3:43 PM

Caribbean Business

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Firms sue PR govt over Recovery Act A pair of investment funds have filed suit in federal court against a new Puerto ...

Issued: June 29, 2014 An evaluation of Puerto Rico’s finances that brings employee salaries in li ... Standard & Poor’s, Moody’s Investors Service and Fitch Ratings have all downgraded the Puerto Rico Electric Power Authority within 24 ho ...

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Caribbean Business - More Local News - Page2RSS

Monday June 30th, 2014 at 3:39 PM

Caribbean Business - More Local News

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30 Jun ' 05:56

Moody’s, Fitch cut Prepa deeper into junk; point to restructuring legislation Issued: June 26, 2014 Moody’s Investors Service and Fitch Ratings both downgraded the Puerto Rico Electric Power Authority deeper into “junk” territory on Thursday saying...

To protect the ESA of the total insolvency

Monday June 30th, 2014 at 3:35 PM

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June 30, 2014

Recently rocked by new credit and liquidity problems even for the purchase of fuel degradation, the Electric Power Authority (PREPA) should become the first government instrumentality to assume renegotiation of its credit, covered in the new Law Enforcement with Debts and Recovery of public corporations.

Is dramatically true that, in addressing this sensitive issue of an essential public service, the determination is short; and that, consequently, the new statute, signed Saturday by Gov. Alejandro Garcia should have in the case of ESA his first test. Because of what it is to take the path towards total bankruptcy, and keep on walking, to an instrumentality seriously undermined by financial ailments, administrative blur and operational deficiencies. As recently as this past Thursday, Moody's Investors Services again downgrade the credit of this corporation a lower level within the range that is considered speculative. That day came from another classification society Similarly, Fitch Ratings, which analysts expressed in his report that responds to this degradation has increased the expectation that the public corporation terminated without ability to meet its debt obligations. How to close a cycle 24 hours intensely negative for EEE, Friday Standard & Poor's also proceeded to downgrade the debt, this time pulling down two levels within the speculative level; and, like other firms, reacting to the adoption of the statute. Bondholders firms also begin at the federal level, to challenge the law.  But financial and structural problems of the ESA require strong and own solutions, because far worse seem to improve as the economic situation worsens, leading to the instrumentality ground of insolvency. When looking at the main indicators of the ESA, clearly demonstrates its seriousness. His production fell from 23.397 million kilowatts / hour in 2003 to 21,493,000 in 2013. During the same period, the largest decline was in the line of industrial consumption fell 4.005 million kilowatts / hour 2,504 million, a reduction 37.4%. This drop in production has dramatically compromised their financial viability. While assets increased from $ 8.242 million to $ 10.157 million between 2003 and 2013, liabilities increased from $ 7.770 million to $ 10.949 million. The result was then that the capital base of the ESA decreased from positive to $ 472 million to an impairment of $ 792 million. This scenario, therefore, reveals that the ESA drag a heavy burden of insolvency that require government intervention to restructure its massive debt and operations in order to avoid collapse. In the short term, this corporation is in a very dangerous crossroads, which may involve deciding whether allocates few resources to ensure you are buying fuel, or the payment of debt service amounting to $ 678 million annually.  So, having a law available, the challenge for government is to start ESA restructuring cycle. In the short term, the goal should be to keep the operational stability of instrumentality, and reach agreements acceptable to the bondholders and the corporation. In the medium and long term, the aim should be to completely reinvent the ESA, in order that the country provided a production model fiscally stable, reliable and energy costoefectivo. Starting the enactment of the new law restructuring the debt ESA, to be successful as we hope, will be a big step for the rest implemented in corporations with very serious and urgent fiscal problems.

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Puerto Rico's debt restructuring law raises default risk - Moody's: Thomson Reuters Business News

Monday June 30th, 2014 at 3:33 PM

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June 30 (Reuters) - Puerto Rico's new debt restructuring law will increase the default risk for public corporations, Moody's Investors Service said on Monday.

The law "signals the Commonwealth's diminished willingness to support public corporations that have historically relied on the commonwealth's general tax revenues to pay for operating deficits and borrowing needs," Moody's said.

The law, passed last Wednesday, lays out a bankruptcy-like process for some public corporations. It applies to semi-autonomous public authorities that manage Puerto Rico's infrastructure and are unable to pay their debts. (Reporting by Arnab Sen in Bangalore; Editing by Joyjeet Das)

(c) Copyright Thomson Reuters 2014. Click For Restrictions - <a href="http://about.reuters.com/fulllegal.asp" rel="nofollow">http://about.reuters.com/fulllegal.asp</a>

Puerto Rico’s Default Plan May Spread Pain Beyond Utility

Monday June 30th, 2014 at 3:29 PM

Businessweek.Com -- Top News

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The U.S. municipal-bond market begins the week wondering whether the Puerto Rico Electric Power Authority, the commonwealth’s sole provider of electricity, will pay bondholders tomorrow after lawmakers last week enacted debt-restructuring legislation.

If the utility known as Prepa fails to act, the blow would be the latest absorbed by investors buffeted by bankruptcies in Jefferson County, Alabama, and Detroit. The defaults call into question the underpinnings of the $3.7 trillion market.

“Puerto Rico has crossed the Rubicon; it’s crossed the line,” Richard Larkin, director of credit at Fairfield, Connecticut, investment firm Herbert J. Sims & Co., said from his office in Boca Raton, Florida. “This is absolutely a big deal and bigger than Detroit and bigger than Jefferson County because there’s more money involved.”

The bill signed by Governor Alejandro Garcia Padilla allows certain public corporations to restructure debt outside of bankruptcy proceedings. Bondholders have been speculating for months that a Puerto Rico agency would default. Prepa seems poised to be the first if it can persuade three-quarters of its creditors to agree, and if the commonwealth beats back a lawsuit challenging the law.

Payment Due

The utility, which raided its capital budget last month to buy fuel, has $8.6 billion of debt, with about 70 percent not covered by bond insurance, data compiled by Bloomberg show.

Prepa owes more than the $8 billion of general obligations and water-and-sewer debt in Detroit’s record bankruptcy and the $4.2 billion that led to Jefferson County’s failure. The agency, with the third-lowest speculative grade from Fitch Ratings, is due to make a bond payment tomorrow and about $204 million of its securities mature that day, according to data compiled by Bloomberg.

David Millar, a New York-based spokesman for the Government Development Bank, said the bond trustee has enough money to make the payment. Abimael Lisboa Felix, a Prepa spokesman, didn’t return e-mails seeking comment on its plans.

A restructuring decision would be felt in all corners of the U.S., as the commonwealth’s securities are tax free nationwide and widely held by pensions and mutual funds that invest in the muni market. The commonwealth and its agencies owe $73 billion, with about 66 percent of U.S. muni mutual funds holding the securities, according to Morningstar Inc.

Watershed Moment

The turning point comes after years of economic anguish. Puerto Rico’s economy has struggled to grow since 2006 and its 13.8 percent unemployment rate is more than double the U.S. average. Yet the competitive advantage afforded by the tax-free bonds made it easy for Puerto Rico and its agencies to sell debt to plug budget deficits and cover operating expenses, the combination that drove New York City to bankruptcy’s brink in the 1970s.

The restructuring measure, sought by Garcia Padilla, would allow some public entities to negotiate to reduce their debt loads. The bill allows public corporations to talk with investors for nine months once 50 percent of bondholders agree to discussions. Any restructuring would require approval of 75 percent of bondholders.

The measure’s effect may extend beyond the corporations. The three largest rating firms cut Puerto Rico to junk beginning in February. The bill excludes general-obligation and sales-tax bonds, but the speculative credit rating may be lowered more, Standard & Poor’s said. The measure may signal “a potential shift in the commonwealth’s historically strong willingness to continue to meet its obligations,” analyst David Hitchcock said in a report.

No Mas

The governor has said the commonwealth will repay its general obligations. Some have given up on promises.

“I’ve lost all confidence in the collective leadership of Puerto Rico,” Larkin said.

San Mateo, California-based Franklin Funds and Oppenheimer Rochester Funds in Rochester, New York, filed suit June 28 after the governor signed the bill.

Franklin Funds, with $907.2 million of Prepa debt, and Oppenheimer, holding $821.4 million, are asking a U.S. District Court in Puerto Rico to declare the new law unconstitutional. The companies argue that Puerto Rico can’t usurp the power of federal courts by enacting what amounts to its own bankruptcy law, according to their filing.

The commonwealth will defend the law, Millar said.

Priced In

Debt sold in Puerto Rico has been trading at distressed levels since August on concerns that the island of 3.6 million wouldn’t repay its obligations.

Uninsured Prepa bonds maturing July 2040 traded today at 10:00 a.m. at an average 44.5 cents on the dollar, the lowest ever and down from 51.9 cents on June 25, the day that Garcia Padilla filed the restructuring bill. Fitch Ratings last week dropped Prepa to CC, its third-lowest speculative grade. S&P and Moody’s Investors Service also give the utility a junk rating.

Since Puerto Rico’s Senate approved the bill June 25, prices of Prepa bonds maturing within four years have dropped by as much as 40 percent, the investment firms stated in the court filing.

If Prepa or other agencies were to pay creditors less than the bonds’ original prices, insurers such asAssured Guaranty Ltd. (AGO:US) and MBIA Inc’s National Public Finance Guarantee Corp. would be forced to make up the difference with investors holding insured securities. Other bondholders don’t have that extra security.

No Protection

Dominic Frederico, chief executive officer of Assured, said in a June 27 meeting with BTIG LLC that the company’s worst-case scenario would be a 20 percent loss on its $852 million exposure to Prepa debt, according to a report by BTIG analyst Mark Palmer.

Assured fell 6.5 percent (AGO:US) last week, the most since the week ending Jan. 17, to $24.78.

Along with Prepa, the law enables the Puerto Rico Highways & Transportation Authority to restructure $5.5 billion of debt, and for the Puerto Rico Aqueduct & Sewer Authority to alter its $3.7 billion, according to data compiled by Bloomberg. About 90 percent of the Prasa debt and 40 percent of highway authority bonds aren’t insured.

With 1.48 million customers and $4.94 billion in revenue in 2012, Prepa is the biggest U.S. public power utility, according to the American Public Power Association. The utility took $100 million from its capital budget last month to purchase fuel.

Prepa may offer investors less than 10 cents on the dollar, said Matt Fabian, managing director at Concord, Massachusetts-based research firm Municipal Market Advisors, which may complicate the task of getting three-quarters of creditors to accede. He said that high bar might offer investors comfort.

“That will make consensus even harder to get,” Fabian said.

To contact the reporter on this story: Michelle Kaske in New York at <a href="mailto:mkaske@bloomberg.net">mkaske@bloomberg.net</a>

To contact the editors responsible for this story: Stephen Merelman at <a href="mailto:smerelman@bloomberg.net">smerelman@bloomberg.net</a> Mark Schoifet

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7 Best Places to Visit in Old San Juan Puerto Rico

Monday June 30th, 2014 at 3:27 PM

Squidoo: 7 Best Places To Visit In Old San Juan Puerto Rico

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My first stop was at 

El Morro(long name, Castillo de San Felipe del Morro)

, a more than 400 year old fortress that was built by the Spanish, later occupied by the Americans and is still in pretty good shape after all those years!

In fact, it is actually found on UNESCO's Official List of 

World Heritage Sites. 

And as you will see in my photos later, there are 3 flags flown side by side – the old Spanish flag, an American flag and the Puerto Rican flag – I guess, as a mark of respect to each era

There are 6 levels in El Morro and it was really fascinating and overwhelming at the same time, as I made my way to each level, through winding stairways, dimly lit alleyways, long corridors and came upon the surprising lookouts as well as hidden and common rooms.

When you consider that they did not have all the modern excavation and building tools and machinery at their disposal to build this fortress, then you will be truly impressed and awestruck with the sheer magnificence of this structure and the craftsmanship and skill that went into building it.

With the help of life sized mannequins, pictures and various aged articles strategically placed to replicate life in the 15th & 16th centuries, I was convincingly permitted to conjure up feelings of what life was like for the men who called this fortress home back then.

The grounds surrounding El Morro are breathtakingly lovely!!!

 One of my favourite photos is one which I took of 

'El Cementario de San Juan'

 (San Juan Cemetery) and the sea in the background. I have shared it with you in the photos below which give you a glimpse, through my eyes, of what you can expect to see in and around El Morro.

There is so much to see and there are no elevators (smile). So make sure to put on comfortable shoes like me.

Just in case you are unable to do as much walking yourself, like I did, and you feel to go at a slower pace, there's a trolley car that runs through the city.

Image credit: All photos are compliments myself, and are copyright. Do not print or copy!

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U.S. bond funds sue Puerto Rico, worried about bankruptcy threat

Monday June 30th, 2014 at 3:24 PM

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(Reuters) - U.S. mutual funds holding about $1.7 billion in Puerto Rico debt have sued the cash-strapped commonwealth, accusing it of passing a law modeled after the U.S. bankruptcy code that could undermine the rights of American investors.

Last week's rushed passage of the law has spooked the $3.7 trillion U.S. municipal bond market, sending down prices of revenue bonds issued by Puerto Rico's electric authority. U.S. municipal bonds funds are the largest holders of the island's debt because it is tax-exempt in every state.

Puerto Rico is one of the largest issuers of debt in the U.S. municipal bond market. Under its constitution, Puerto Rico does not have the power to enact a bankruptcy law for the adjustment of its debts. The complaint contends Puerto Rico passed an act modeled after title 11 of the U.S. Bankruptcy code, which is used by U.S. corporations to reorganize.

Bond funds run by OppenheimerFunds, a unit of insurer MassMutual Financial Group, and Franklin Templeton, filed an amended complaint against the commonwealth on Sunday in U.S. District Court in Puerto Rico.

The debt restructuring law approved last week only applies to some of the U.S. territory's public corporations, most notably the Puerto Rico Electric Power Authority which has a bond payment due on Tuesday. The law specifically excludes the commonwealth and it Government Development Bank from being able to restructure.

Puerto Rico's financial leadership put out a statement on Monday reassuring bondholders and investment firms that the law "in no way indicates any shift in Puerto Rico’s historical and constitutionally supported commitment to honoring its financial obligations."

Standard & Poor's Ratings Service on Friday put the entire commonwealth's general obligation and appropriation debt on Creditwatch with negative implications in response to the law.

Moody's Investors Service, meanwhile, said on Monday the law shows the commonwealth's "diminished willingness" to support the corporations, which it frequently props up. The Puerto Rico Aqueduct and Sewer Authority and the Highways and Transportation Authority (PREPA) have a combined $20 billion in debt outstanding.

In their lawsuit, the mutual funds ask a federal judge to declare that Puerto Rico's recently passed Public Corporation Debt Enforcement and Recovery Act violates the U.S. Constitution.

"The Act purports to offer to certain public corporations within the Commonwealth the ability, among other things, to invoke protections from creditors and modify debts," the funds said in the amended complaint. "The Act is expressly modeled on title 11 of the United States Code."

Franklin Funds, a unit of Franklin Resources Inc, holds about $907.2 million in revenue bonds issued by the Puerto Rico Power Authority (PREPA). Oppenheimer's Rochester funds hold about $821.4 million in the PREPA bonds, according to the complaint.

Since the law passed, the price of long-dated PREPA bonds, or those maturing in 20 years or beyond, have dropped by about 15 percent, according to the complaint. Short-dated bonds, or those maturing over the next four years, have fallen as much as 40 percent, the complaint said.

PREPA is also negotiating expiring lines of credit with Citibank and ScotiaBank de Puerto Rico.

Prices on the $3.5 billion in junk bonds Puerto Rico issued earlier this year have been rallying since the law was introduced on Wednesday because investors now expect the commonwealth would not bail out the struggling corporations.

The island's financial troubles have also spread to the bond insurance industry. On Monday, New York brokerage BTIG downgraded MBIA Inc to neutral from buy because of the insurer's $1.531 billion exposure to PREPA debt. MBIA Inc shares fell 4.9 percent on Monday.

"The catalyst for the new law was the deterioration of PREPA’s liquidity position during the past few weeks as the electricity monopoly has been running out of cash to even purchase fuel and has been trying to renegotiate its lines of credit with its banks," BTIG said in a note.

But it said it was maintaining its buy recommendation for Assured Guaranty, which has a $5.34 billion exposure to Puerto Rico's debt, about half of which is subject to the new law. Assured shares were down 1.2 percent.

(Reporting by Tim McLaughlin in Boston and Lisa Lambert in Washington; Editing by Tom Brown)

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S&P puts Puerto Rico aqueduct and sewer under review for potential downgrade

Monday June 30th, 2014 at 3:23 PM

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WASHINGTON, June 30 Mon Jun 30, 2014 11:36am EDT

WASHINGTON, June 30 (Reuters) - Standard & Poor's Ratings Service said on Monday it was putting Puerto Rico Aqueduct & Sewer Authority under review for potential downgrade, after the territory last week passed a law allowing public corporations to restructure their debts.

The agency rates PRASA BB+. The placement on CreditWatch, with negative implications, affects more than $3.4 billion in debt, the agency said.

The agency expects to conduct the review in step with its broader look at Puerto Rico's debt, and it could resolve the credit watch if PRASA decides to restructure its debt under a new law within the next 90 days.

Last week, Puerto Rico passed a law allowing its public corporations to restructure their debts in a process akin to filing for bankruptcy. As a result, S&P is evaluating the credit strength of the commonwealth and some of its entities. PRASA has said it will not take advantage of the option. (Reporting by Lisa Lambert; Editing by James Dalgleish)

Puerto Rican drug trafficking as the U.S misdirects its focus on the War on Drugs

Monday June 30th, 2014 at 3:21 PM

Council On Hemispheric Affairs

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By: Clare Hogan, Research Associate at the Council on Hemispheric Affairs

Though never having been fully embraced as a state, Puerto Rico’s auspicious location in the central Caribbean has made it a longstanding interest of the United States. The area is respectably self-governing, yet still remains answerable to the United States in many aspects of its defense and foreign policy. U.S. Federal departments control the island’s international commerce, military operations, travel governances, transport regulations, and other countless legalities.[1] Thus, it is fair to assert that the United States should preserve its influence over the affairs of the commonwealth, especially with regards to trade, commerce, and international aspects of finances.

Nonetheless, the territory is ominously proving to be a principal actor in the illegal trafficking of drugs from Latin America into the U.S. mainland, indicating a noticeable failure of the national government to manage its own proprietary. Puerto Rico’s fundamental role in the illicit drug trade is particularly poignant considering the United States’ exorbitantly expensive War on Drugs. Evidently, Washington has no problem apportioning billions of tax dollars to pay for the unpopular internal drug war, yet an obvious need for funds and resources to secure the Puerto Rican border is being conveniently overlooked. The federal government demonstrates an irresponsible oversight by misallocating these valuable resources, and this error in judgment is proving increasingly devastating as drug trafficking routes through Puerto Rico grow.

No Customs No Problem

Although the U.S. government has played an active role in attempting to reduce drug trafficking rates, the flow of narcotics continues to reach new records, with more smugglers transporting drugs directly from South America to Puerto Rico. The legal distinction of Puerto Rico as a U.S territory expedites the smuggling process, as shipments departing Puerto Rico for the United States are not required to clear customs. Under current conditions, therefore, concealed drugs have a disturbingly good chance of entering the U.S. mainland undetected.[2]

Additionally, the coastline of Puerto Rico offers more than 700 miles of rough terrain and naturally occurring clandestine hideouts, which have proven advantageous for drug smugglers evading detection. The consistent traffic of tourism to Puerto Rico further complicates regional authorities’ efforts to identify illegal smuggling activity.[3] Foreign travelers essentially monopolize the focus of local security personnel and absorb efforts that could instead be used to patrol the coast.

Corruption in all arenas

Internal corruption among Puerto Rican officials has also plagued the effectiveness of crime-fighting initiatives and efforts to minimize drug trafficking. In recent years, the Puerto Rico Police Department has been heavily criticized, once referred to as “dysfunctional and recalcitrant” by the American Civil Liberties Union.[4] Last May, the United States Department of Justice confirmed the incarceration of sixteen police officers in Puerto Rico for their use of municipal resources to conduct criminal activities. Extortion, robbery, and the distribution of illicit drugs were but a few of the charges.[5]

These infringements of the law are not isolated incidents, however. Within the police force there is a long history of joint cooperation between government officials and organized crime groups. Having practically been institutionalized, corruption within the inner ranks of the government is hardly shocking; Puerto Rico consumes 30percent of all drugs circulated through the area.[6]

Puerto Rico’s Congressional representative, Pedro Pierluisi, stated in his June 2012 address to the Drug Enforcement Administration (DEA) that he did not believe that the organization had demonstrated enough concern for the commonwealth’s security. He argues: “There are nearly three times as many agents assigned to the Miami Field Office as there are to Puerto Rico, even though the island’s population is 7.5 times greater than…Miami’s – and our drug-related violence is off the charts.”[7] Though neglect cannot be considered a criminal act, in disregarding an issue that has such a great potential for disaster, the DEA’s actions are tantamount to enabling drug-related activities in Puerto Rico. In other words, their failure to interject in the area results in an insufficient law enforcement presence and a consequential rise in criminal activity.

The island also has an unusually high common crime rate, as well as a murder rate that is more than six times the U.S. national average. Gang violence connected to an already profitable drug trade – resulting in increased levels of crime, homicide, and drug trafficking through the area – has also become a more prominent issue. Some experts suggest that “increased drug transit through Puerto Rico may facilitate the evolution of domestic gangs by allowing them to form ties with transnational criminals operating on the island.”[8] That is, the gangs in Puerto Rico are not merely benefitting from monetary profits of the drug trade. The business is also increasing the prosperity and influence of these groups, as well as augmenting the frequency of gang-related violence on the island.

The Weakest Link: Lack of Security in Puerto Rico

Recent figures show that over 17,510 kilograms of cocaine have been seized en route to Puerto Rico so far this year; meanwhile, in 2011, only about 5,820 kilograms were apprehended in total.[9] That is more than a 300 percent increase within three years. On the surface, this statistic could indicate an achievement in efforts to curb drug trafficking in the area. Upon closer examination, however, the increase clearly demonstrates the reality of the current surge in illegal drugs now being funneled through Puerto Rico. It is estimated that as much as 87,550 kilograms of cocaine circulate annually through the island into the U.S. and interdiction efforts are only catching twenty-percent of that.[10]

Due to their successes in bringing drugs through Puerto Rico, drug smugglers are increasingly comfortable multiplying shipment sizes. Federal offices in charge of monitoring illegal trade and commerce are predominantly occupied with maintaining the heavily patrolled border between the U.S. and Mexico. This has resulted in shockingly poor security throughout the Puerto Rican coastline, as most U.S. resources are aimed at securing the Mexican border. Traffickers have grown increasingly aware of these shortcomings and act accordingly by electing to boat the drugs into areas of Puerto Rico’s ill-guarded 700-mile coastline, rather than attempt a difficult land passage across the US/Mexico border.

This shortage of resources is also disturbingly evident to those tasked with intercepting drug traffickers headed towards the territory. The head of U.S. Southern Command, General John F. Kelly, admits that, due to an insufficient allotment of resources and a significant lack of funding, his forces have failed to capture more than eighty percent of the drugs smuggled through Puerto Rico.[11]

Uncle Sam’s Blunder

Ironically, the federal government’s costly obsession with the War on Drugs could be considered a contributing factor affecting the shortage of resources in Puerto Rico. Washington spends more than $51,000,000,000 every year to pay for the War on Drugs.[12] Billions of dollars are used to incarcerate small-time domestic marijuana and cocaine users while an entire commonwealth of almost four million people suffers from a lack of resources to combat serious drug trafficking. Instead, the logical solution would be to use some of these funds to secure Puerto Rico’s borders; however, it appears the federal government fails to consider such an alternative. Washington’s displaced preoccupation with controlling consumption inside the U.S. is resulting in a failure to acknowledge the real issue: the illegal entrance of drugs through the country’s own territory.

This imprudent misallocation of national assets is irrational and wasteful. The War on Drugs is considered by most to be an exhaustive and ineffective anti-drug obsession. Why, then, is our government continuing to spend excessive amounts of money on it? Resources should be redirected away from the current internal War on Drugs, towards the drug issues that have real potential for resolve, such as those in Puerto Rico.

Punishing The Consumer

Beginning with the Nixon administration, the War on Drugs has been responsible for more than forty years of massive government spending, elevated incarceration rates, long-term prison populations, and an increase in drug-related violence and crime. Currently, the United States has the highest documented incarceration rate in the world, with over 1.5 million people put in jail this past year on non-violent drug charges.[13] Since 2003, the government budget for drug prevention has been decreasing steadily while funding has increased in favor of local law enforcement playing a greater role in the fight against illicit drug trade and consumption.[14]

A portion of this disparity can in part be attributed to the establishment of thousands of drug courts. These municipalities are proving to be impractical and expensive, largely because they command the use of public courtrooms as well as large staffs of prosecutors, judges, and other officials.[15] The cost to operate drug courts heavily outweighs any special benefits they could potentially generate because the results have failed to prove effective. Those who are considered “drug dependent” oftentimes do not receive the health treatments they need, but are instead punished with incarceration. Additionally, many offenders who find themselves in drug courts are ultimately coerced into pleading guilty, told they will then be eligible for special rehabilitation programs. This practice has long-lasting detrimental results as most of the participants leave court with “criminal records that often act as lifetime barriers to many aspects of social, economic and political life in the U.S.”[16]

Moreover, while some may believe that money apportioned for the drug war emphasizes the prevention of illegal trafficking through the borders of the United States, the reality of the situation is that the domestic law enforcement budget is more than three times the size of the interdiction budget.[17] Evidently, there is a much greater emphasis being placed on punishing the consumer than there is on preventing illegal drugs from entering the country in the first place. Ethan Nadelman, founder and executive director of the Drug Policy Alliance, asserts that the United States’ punitive policies and prohibition of drugs are doing more harm than good. These beliefs concur with former President Jimmy Carter’s notions that “the harms caused by drug laws should not exceed the harms caused by the drugs themselves.”[18] Unfortunately, this is exactly the case; prison populations continue to expand while drug-related violence worsens and the quantity of smuggled shipments entering the United States is only increasing. The recently emergent shelter role of Puerto Rico in the illegal drug trade serves to depict the unintended detrimental consequences of the War on Drugs.

Conclusion

The paramount question going unaddressed is why the federal government continues to inappropriately misdirect funds that could instead be used to help secure drug trafficking in areas like Puerto Rico. Rather than pursuing a highly contested and costly War on Drugs, the U.S. government should be funneling resources and funds into Puerto Rico to control, if not prevent, the entry of these illegal drugs. This would simultaneously reduce much of the United States’ supply of unlawful substances as well.

In the absence of decriminalization or legalization, the drug traffic trade will certainly continue to exist and prosper in Latin America and the United States. Realistically though, the U.S. government does not have legal jurisdiction over countries in Central and South America, nor does it possess the resources or necessary political clout to combat this drug trafficking. Puerto Rico, however, is formally under U.S. jurisdiction, thereby affirming the federal government’s quasi authority and responsibility to the region.

Based on the reported funds allocated annually to the Federal Drug Control Spending budget, it appears that federal departments such as Homeland Security and the DEA have ample resources to combat drug trafficking through Puerto Rico and improve border security in the territory.[19] However, resources needed at the US/Mexico border understandably take precedence in the eyes of government officials; almost ninety percent of the cocaine in the U.S. comes from Mexico, and violence over the conflict completely overwhelms the region.[20] Still, few funds remain to buttress the protection of Puerto Rican borders and interdiction efforts.

Consequently, the federal government should reconsider its allocation of funds and other resources in an attempt to redirect its focus on the War on Drugs and determine where resources are needed and where they are not. It is evident that internal efforts to combat the War on Drugs are proving ineffective and not up to the job in terms of the national budget and security requirements. Therefore, Washington may find it more beneficial to reduce efforts in fighting internal drug consumption and instead use these resources to aid in Puerto Rican border control and anti-drug trafficking initiatives.

Please accept this article as a free contribution from COHA, but if re-posting, please afford authorial and institutional attribution. Exclusive rights can be negotiated. For additional news and analysis on Latin America, please go to: <a href="http://LatinNews.com" rel="nofollow">LatinNews.com</a> and Rights Action.

References

[1] Puerto Rico, “Government”, Welcome to Puerto Rico.http://www.topuertorico.org/government.shtml

[2]Alvarez, Lizette, “In Puerto Rico, Cocaine Gains Access to U.S.”, The New York Times, May 29, 2014

[3] High-Intensity Drug Trafficking Area: Office of National Drug Control Policy. “Puerto Rico/U.S. Virgin Island HIDTA”, 2001 Annual Report

[4] American Civil Liberties Union, “Island of Impunity: Puerto Rico’s Outlaw Police Force”, June 2012. 2-3.

[5] CNN Staff, “Puerto Rican police indicted for running ‘criminal organization’,” CNN Justice. May 22, 2014.

[6] HIDTA

[7] Pierluisi, Pedro R. “Statement and Questions as Prepared for Delivery: Oversight of the U.S. Drug Enforcement Administration”. U.S. House of Representatives, June 20, 2012

[8] Gurney, Kyra, “Anti-Gang Op Highlights Puerto Rico’s Micro-Trafficking Troubles,” Insight Crime: Organized Crime in the Americas. June 6, 2014

[9] Alvarez, Lizette

[10] Ibid.

[11] Ibid.

[12] Drug Policy Alliance, “Drug War Statistics,” Drug Policy Alliance. Accessed June 5, 2014.http://www.drugpolicy.org/drug-war-statistics

[13] Ibid.

[14] Executive Office of the President of the United States, “FY 2015 Funding Highlights,” National Drug Control Budget. March 2014. 2-15.

[15] “Moving Away From Drug Courts”

[16] Ibid.

[17] “FY 2015 Funding Highlights”

[18] Caiger-Smith, William, “Prohibition is more dangerous,” Drug Policy Alliance. June 30, 2009.http://www.drugpolicy.org/resource/%E2%80%9Cprohibition-more-dangerous%E2%80%9D

[19] “FY 2015 Funding Highlights”

[20] CNN Library, “Mexico Drug War Fast Facts”, CNN World. March 15, 2014. <a href="http://www.cnn.com/2013/09/02/world/americas/mexico-drug-war-fast-facts/" rel="nofollow">http://www.cnn.com/2013/09/02/world/americas/mexico-drug-war-fast-facts/</a>