General-obligation bondholders reached an agreement, but the bankruptcy may hinge on the treatment of other debt.
The seemingly never-ending saga of Puerto Rico’s unprecedented bankruptcy took another turn during the weekend. In what’s being hailed as a big step forward for the commonwealth, it reached a tentative agreement with Aurelius Capital Management, Autonomy Capital and other investors who own $8 billion of the island’s bonds.
The move is certainly significant. For one, it appears to end the push to invalidate entirely some of the island’s general-obligation bonds. Also, Aurelius is infamous on Wall Street for spending more than a decade in court fighting Argentina for repayment on its bonds, so the fact that it seems to see the limits of a hardball strategy is reason to believe the finish line could be in sight for Puerto Rico. Bloomberg News’s Michelle Kaske reported the details:
Bloomberg Markets
By Brian Chappatta
February 11, 2020, 7:30 AM PST