Tags: de blasio | hedge funds | puerto rico | new york mayor

NYC's De Blasio: Hedge Funds Are Invested in Puerto Rico's Failure

Image: NYC's De Blasio: Hedge Funds Are Invested in Puerto Rico's Failure

Saturday, 07 Nov 2015 01:02 PM

New York Mayor Bill de Blasio described some hedge-fund managers as predators endangering Puerto Rico’s 3.5 million residents by demanding cuts in spending and services to ensure they’re paid in full on bonds purchased at cents on the dollar.

“We’ve all heard the phrase ‘Follow the money,”’ de Blasio said during a City Hall news briefing a day after returning from the U.S. commonwealth. “There is a very powerful group of people in the private sector who are actually hoping that Puerto Rico fails. We can’t allow it to hold up action.”

The mayor this week traveled to Puerto Rico in a group including Governor Andrew Cuomo and City Council Speaker Melissa Mark-Viverito, a native of the island who in August used the term “vulture” to describe investors who hold billions of dollars of its high-yield debt. The financiers have called for cutbacks in health care, education and public works spending so they can be repaid.

The New Yorkers, for whom Puerto Ricans are powerful voting bloc, attended a rally to call upon Congress to allow some agencies to file for bankruptcy, and to boost funding for health-care programs. The island, which owes about $73 billion, could run out of cash within weeks.

President Barack Obama and Puerto Rico officials have asked federal lawmakers to allow some agencies to file for bankruptcy and boost funding for health-care programs, requests that haven’t advanced for lack of Republican support.

De Blasio didn’t name any hedge funds with the “very bad motivations” he described.  

At Marathon Asset Management, which holds bonds in Puerto Rico’s troubled electric utility, executives have said that rather exploiting the situation, they offer the island’s best opportunity to recover.

On Thursday, the Puerto Rico Electric Power Authority entered into a debt-exchange agreement with some investors, including Marathon, that puts it a step closer to reducing its $8.3 billion debt load. Bondholders agreed to cut the amount of its outstanding bonds by 15 percent and provide near-term debt service relief.

“We are pleased to be able to make official what we believe is a reasonable deal with substantial concessions from bondholders that will significantly benefit the people of Puerto Rico,” said Stephen Spencer of Houlihan Lokey, the PREPA Bondholder Group’s financial adviser.


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New York Mayor Bill de Blasio described some hedge-fund managers as predators endangering Puerto Rico's 3.5 million residents by demanding cuts in spending and services to ensure they're paid in full on bonds purchased at cents on the dollar.
de blasio, hedge funds, puerto rico, new york mayor
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2015-02-07
Saturday, 07 Nov 2015 01:02 PM
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