Aujourd'hui, les Réseaux d'Information répond aux besoins d'informations précises sur les événements survenant sur le terrain.
Saturday, January 31, 2015
Gov. García Padilla's Leadership 'A Failure', Says Hispanic Leadership Fund
Puerto Rico Gov. Alejandro García Padilla and his administration's policies have been labeled as a "failure" by a non-partisan advocacy organization.
The Hispanic Leadership Fund (HLF), which claims to promote public policy solutions based on "free enterprise, limited government and individual freedom" for working families, released a fact sheet on the "reckless leadership" of the Puerto Rican governor. The HLF stated Puerto Rico's GDP declined by almost 2 percent during 2014 with a 14 percent unemployment rate and lowest labor force participation rate in the Western Hemisphere at 41 percent.
According to the HLF, the cost of living rate is 13 percent more expensive compared to mainland U.S., and 100,000 Puerto Ricans have left the island since Garcia Padilla's inauguration in 2013.
Garcia Padilla is reportedly meeting with members of Congress, but the HLF said Congress "should not be fooled" by the governor and his administration's facts and figures. HLF President Mario H. Lopez added, "Puerto Rico is an economic and fiscal mess under García Padilla. We urge Congress to institute a financial control board over Puerto Rico."
The HLF's fact sheet further claimed the island's rule of law has been eroded as Garcia Padilla's administration "refuses to honor the rulings of the island's judicial system, thus jeopardizing the livelihood of more than 1,000 employees of Doral Bank that live and work [in Puerto Rico]" and "Law 66-the Fiscal and Operational Sustainability Act-enables the Puerto Rican Government to cancel contracts unilaterally with private businesses."
The HLF has called for a Financial Control Board for Puerto Rico to analyze the island's financial and legal practices. The organization previously launched an advertisement campaign about Puerto Rico's economic issues, claiming Garcia Padilla's leadership resulted in high debt, tax increases, job loss and plant closures.
"Puerto Rico can no longer afford the policies of Governor García Padilla," said Lopez in a statement about the ad campaign. "With 14 percent unemployment, a jobless rate of 39 percent among younger Puerto Ricans, 80 new taxes implemented and 47,000 jobs lost under his watch, the Puerto Rican people have suffered enough."
"The erosion of the rule of law and the disregard for court judgments under Governor García Padilla have led many investors to question whether Puerto Rico is a safe place to invest and do business," added López, "This is unquestionably harmful for individuals and families trying to make a better life for themselves."
Latin Post contacted the Puerto Rico Federal Affairs Administration (PRFAA) for comment, but the organization did not respond as of press time.
The PRFAA represents Puerto Rico before local, state and federal governments. The PRFAA also promotes the Puerto Rican government's economic and public policy initiatives to "achieve a better quality of life" for approximately four million U.S. citizens living in Puerto Rico.
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For the latest updates, follow Latin Post's Michael Oleaga on Twitter: @EditorMikeO or contact via email: m.oleaga@latinpost.com.
By Michael Oleaga
Gov. García Padilla's Leadership 'A Failure', Says Hispanic Leadership Fund
The Hispanic Leadership Fund (HLF), which claims to promote public policy solutions based on "free enterprise, limited government and individual freedom" for working families, released a fact sheet on the "reckless leadership" of the Puerto Rican governor. The HLF stated Puerto Rico's GDP declined by almost 2 percent during 2014 with a 14 percent unemployment rate and lowest labor force participation rate in the Western Hemisphere at 41 percent.
According to the HLF, the cost of living rate is 13 percent more expensive compared to mainland U.S., and 100,000 Puerto Ricans have left the island since Garcia Padilla's inauguration in 2013.
Garcia Padilla is reportedly meeting with members of Congress, but the HLF said Congress "should not be fooled" by the governor and his administration's facts and figures. HLF President Mario H. Lopez added, "Puerto Rico is an economic and fiscal mess under García Padilla. We urge Congress to institute a financial control board over Puerto Rico."
The HLF's fact sheet further claimed the island's rule of law has been eroded as Garcia Padilla's administration "refuses to honor the rulings of the island's judicial system, thus jeopardizing the livelihood of more than 1,000 employees of Doral Bank that live and work [in Puerto Rico]" and "Law 66-the Fiscal and Operational Sustainability Act-enables the Puerto Rican Government to cancel contracts unilaterally with private businesses."
The HLF has called for a Financial Control Board for Puerto Rico to analyze the island's financial and legal practices. The organization previously launched an advertisement campaign about Puerto Rico's economic issues, claiming Garcia Padilla's leadership resulted in high debt, tax increases, job loss and plant closures.
"Puerto Rico can no longer afford the policies of Governor García Padilla," said Lopez in a statement about the ad campaign. "With 14 percent unemployment, a jobless rate of 39 percent among younger Puerto Ricans, 80 new taxes implemented and 47,000 jobs lost under his watch, the Puerto Rican people have suffered enough."
"The erosion of the rule of law and the disregard for court judgments under Governor García Padilla have led many investors to question whether Puerto Rico is a safe place to invest and do business," added López, "This is unquestionably harmful for individuals and families trying to make a better life for themselves."
Latin Post contacted the Puerto Rico Federal Affairs Administration (PRFAA) for comment, but the organization did not respond as of press time.
The PRFAA represents Puerto Rico before local, state and federal governments. The PRFAA also promotes the Puerto Rican government's economic and public policy initiatives to "achieve a better quality of life" for approximately four million U.S. citizens living in Puerto Rico.
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For the latest updates, follow Latin Post's Michael Oleaga on Twitter: @EditorMikeO or contact via email: m.oleaga@latinpost.com.
By Michael Oleaga
Gov. García Padilla's Leadership 'A Failure', Says Hispanic Leadership Fund
Thursday, January 29, 2015
Puerto Rico aims to insure $500 mln of $2 bln bond deal
(Corrects company name in paragraph 2 to National Public Finance Guarantee Corp, not National Public Financial Guaranty)
NEW YORK Jan 28 (Reuters) - Puerto Rico is negotiating with at least two bond insurers to insure around $500 million of a planned $2 billion bond issue, a move that would extend the appeal of the sale beyond the hedge funds currently buying the U.S. commonwealth's debt, according to two sources close to the process.
The island's Government Development Bank (GDB) is in talks with MBIA's National Public Finance Guarantee Corp and Assured Guaranty, the sources said. The insurers already have substantial exposure to Puerto Rico's debt and may be trying to protect their exposure in other areas by helping Puerto Rico raise more money.
The insured part of the deal would have a coupon of 5 percent, the sources said. Assured Guaranty and MBIA did not immediately respond to a request for comment. (Reporting by Edward Krudy; Editing by Chris Reese)
Puerto Rico aims to insure $500 mln of $2 bln bond deal
NEW YORK Jan 28 (Reuters) - Puerto Rico is negotiating with at least two bond insurers to insure around $500 million of a planned $2 billion bond issue, a move that would extend the appeal of the sale beyond the hedge funds currently buying the U.S. commonwealth's debt, according to two sources close to the process.
The island's Government Development Bank (GDB) is in talks with MBIA's National Public Finance Guarantee Corp and Assured Guaranty, the sources said. The insurers already have substantial exposure to Puerto Rico's debt and may be trying to protect their exposure in other areas by helping Puerto Rico raise more money.
The insured part of the deal would have a coupon of 5 percent, the sources said. Assured Guaranty and MBIA did not immediately respond to a request for comment. (Reporting by Edward Krudy; Editing by Chris Reese)
Puerto Rico aims to insure $500 mln of $2 bln bond deal
Wednesday, January 28, 2015
First State and Local Level Economic Census Data Now Available
Today the Census Bureau released manufacturing statistics from its 2012 Economic Census at the state, metro area and county levels, as well as for cities and towns, for more than 350 manufacturing industries. These data, referred to as the Geographic Area Series, cover more than 296,000 U.S. manufacturing establishments (NAICS 31-33) within every state and their localities.
“These Geographic Area Series reports are the only source of detailed economic information for more than 15,000 cities, towns and other similar places in the U.S.,” Census Bureau Director John H. Thompson said. “We are pleased that over the course of this year, the Geographic Area Series will be providing for 18 sectors of the economy − economic information for the first time for more than 5,000 small towns. This unique data set is indispensable in assessing the performance of the economy in every corner of the country.”
An illustration of the geographic detail this series offers is provided by examining statistics for California, the Los Angeles-Long Beach-Anaheim metro area, and Los Angeles County and city. California had more manufacturing establishments (38,741) and employees (1.2 million) than any other state. The average annual payroll per employee for California manufacturing establishments rose 21.1 percent, from $49,187 in 2007 to $59,584 in 2012, while the value of shipments from the state’s manufacturing establishments increased 4.3 percent, from $491.4 billion in 2007 to $512.3 billion in 2012.
Within the manufacturing sector in California, the computer and electronic product manufacturing subsector (NAICS 334) was the largest employer with 177,603 employees. Within this subsector, at the 6-digit NAICS level, the radio and television broadcasting and wireless communications equipment manufacturing industry (NAICS 334220) led employment with 28,153 employees. The petroleum and coal products manufacturing subsector (NAICS 324) reported the highest value of industry shipments of any manufacturing subsector in the state, up 17.0 percent from $77.3 billion in 2007 to $90.5 billion in 2012.
More than 45 percent of the manufacturing establishments in California were located in the Los Angeles-Long Beach-Anaheim metro area (17,461); these establishments reported $211.1 billion in value of industry shipments in 2012. Los Angeles County was home to 12,760 of these establishments; they employed 359,532 people and reported $163.8 billion in shipments in 2012. California’s most populous city, Los Angeles, was home to 5,034 manufacturing establishments, employed 101,103 people and reported shipments of $43.5 billion in 2012.
Selected Findings for Other States
Economic census statistics will be released over a two-year period, through June 2016. About 40 billion cells of data on U.S. businesses with paid employees will be released in total. Separate statistics for 2012 on the approximately 21 million businesses without paid employees are available via census.gov.
While the economic census is the primary benchmark economic program conducted by the U.S. Census Bureau, data on the U.S. economy are also available in various Census Bureau monthly, quarterly and annual surveys. For the manufacturing sector, these surveys include a monthly indicator — the Manufacturers’ Shipments, Inventories, and Orders (M3) survey — and the Annual Survey of Manufactures, but similar programs are also conducted for other economic sectors. These programs publish information similar to what is available from the economic census but at less detailed industry and geographic levels. For more information on the data available from these other surveys for a given industry, see the Industry Statistics Portal.
For more information on the Geographic Area Series, see the Economic Census Release Schedule. To sign up for notifications for when data for the state you are interested in will be released, select the “GET EMAIL UPDATES” button on <business.census.gov>. For information about the geographic areas covered by the economic census (including information on metro area changes and new economic places for 2012), see Understanding Geography on the economic census website.
Los Angeles Alone Has More Than 100,000 Manufacturing Employees
First State and Local Level Economic Census Data Now Available
“These Geographic Area Series reports are the only source of detailed economic information for more than 15,000 cities, towns and other similar places in the U.S.,” Census Bureau Director John H. Thompson said. “We are pleased that over the course of this year, the Geographic Area Series will be providing for 18 sectors of the economy − economic information for the first time for more than 5,000 small towns. This unique data set is indispensable in assessing the performance of the economy in every corner of the country.”
An illustration of the geographic detail this series offers is provided by examining statistics for California, the Los Angeles-Long Beach-Anaheim metro area, and Los Angeles County and city. California had more manufacturing establishments (38,741) and employees (1.2 million) than any other state. The average annual payroll per employee for California manufacturing establishments rose 21.1 percent, from $49,187 in 2007 to $59,584 in 2012, while the value of shipments from the state’s manufacturing establishments increased 4.3 percent, from $491.4 billion in 2007 to $512.3 billion in 2012.
Within the manufacturing sector in California, the computer and electronic product manufacturing subsector (NAICS 334) was the largest employer with 177,603 employees. Within this subsector, at the 6-digit NAICS level, the radio and television broadcasting and wireless communications equipment manufacturing industry (NAICS 334220) led employment with 28,153 employees. The petroleum and coal products manufacturing subsector (NAICS 324) reported the highest value of industry shipments of any manufacturing subsector in the state, up 17.0 percent from $77.3 billion in 2007 to $90.5 billion in 2012.
More than 45 percent of the manufacturing establishments in California were located in the Los Angeles-Long Beach-Anaheim metro area (17,461); these establishments reported $211.1 billion in value of industry shipments in 2012. Los Angeles County was home to 12,760 of these establishments; they employed 359,532 people and reported $163.8 billion in shipments in 2012. California’s most populous city, Los Angeles, was home to 5,034 manufacturing establishments, employed 101,103 people and reported shipments of $43.5 billion in 2012.
Selected Findings for Other States
- Connecticut manufacturers reported the highest average payroll per employee ($64,366) in 2012.
- Texas ranked second and New York ranked third in the number of manufacturing establishments in 2012, with 19,782 and 16,475, respectively.
- Michigan ranked among the top 10 states for number of establishments, annual payroll and total value of industry shipments in 2012.
Upcoming Manufacturing Data Releases
The 2012 Economic Census of Island Areas manufacturing data for Puerto Rico is scheduled to be released in late February. Also scheduled for release in late February is the 2013 Annual Survey of Manufactures statistics.About the Economic Census
The U.S. Census Bureau conducts an economic census every five years and provides a comprehensive and detailed profile of the U.S. economy, covering millions of businesses representing more than 1,400 detailed industries and providing unique portraits of American industries and local communities. The Geographic Area Series reports include the most detailed information available from the Census Bureau about the U.S. economy, including statistics on the number of businesses, employment, annual payroll and sales.Economic census statistics will be released over a two-year period, through June 2016. About 40 billion cells of data on U.S. businesses with paid employees will be released in total. Separate statistics for 2012 on the approximately 21 million businesses without paid employees are available via census.gov.
While the economic census is the primary benchmark economic program conducted by the U.S. Census Bureau, data on the U.S. economy are also available in various Census Bureau monthly, quarterly and annual surveys. For the manufacturing sector, these surveys include a monthly indicator — the Manufacturers’ Shipments, Inventories, and Orders (M3) survey — and the Annual Survey of Manufactures, but similar programs are also conducted for other economic sectors. These programs publish information similar to what is available from the economic census but at less detailed industry and geographic levels. For more information on the data available from these other surveys for a given industry, see the Industry Statistics Portal.
For more information on the Geographic Area Series, see the Economic Census Release Schedule. To sign up for notifications for when data for the state you are interested in will be released, select the “GET EMAIL UPDATES” button on <business.census.gov>. For information about the geographic areas covered by the economic census (including information on metro area changes and new economic places for 2012), see Understanding Geography on the economic census website.
-X-
The statistics presented in this release are based on data from the 2007 and 2012 Economic Census and include data only for establishments with paid employees. Statistics provided in the 2012 Economic Census Geographic Area Series data product releases supersede statistics previously released as part of the 2012 Economic Census Industry Series. All dollar values are expressed in current dollars relative to each survey year, i.e., they are not adjusted for price changes. For more information about the economic census (including a data release schedule and information on comparability, confidentiality, protection, sampling error, nonsampling error and definitions), see http://www.census.gov/econ/census.Los Angeles Alone Has More Than 100,000 Manufacturing Employees
First State and Local Level Economic Census Data Now Available
Puerto Rico s Unemployment Rate Slips
Puerto Rico's unemployment rate declined by four tenths of a percentage point to 13.7% in December.
by Robert Slavin
Puerto Rico s Unemployment Rate Slips
by Robert Slavin
Puerto Rico s Unemployment Rate Slips
Seaborne Airlines offers discount fare between Puerto Rico, Nevis
Seaborne Airlines announced Tuesday the launch of a new one-way fare between Puerto Rico and Nevis to increase the number of Puerto Rican tourists visiting the island of 12,000.
"Our Puerto Rican neighbors are a priority to us, we want you to come and visit us, let us treat you as well as you treat us when we come here, experience everything Nevis has to offer," the CEO of the island's tourism authority, Greg Phillip, said.
Phillip is currently in San Juan with a delegation of officials and hotel and airline representatives - including Seaborne executives - to promote Nevis' attractions.
In a news conference, Seaborne Regional Marketing Manager Hector Montañez announced a new $149 one-way fare between San Juan and Nevis.
The special price also applies to one-way travel from Nevis to San Juan.
The new fare complements other daily commercial flights and charters operated by carriers such as Cape Air, Tradewind Aviation and Air Sunshine, Montañez said. EFE
Seaborne Airlines offers discount fare between Puerto Rico, Nevis
"Our Puerto Rican neighbors are a priority to us, we want you to come and visit us, let us treat you as well as you treat us when we come here, experience everything Nevis has to offer," the CEO of the island's tourism authority, Greg Phillip, said.
Phillip is currently in San Juan with a delegation of officials and hotel and airline representatives - including Seaborne executives - to promote Nevis' attractions.
In a news conference, Seaborne Regional Marketing Manager Hector Montañez announced a new $149 one-way fare between San Juan and Nevis.
The special price also applies to one-way travel from Nevis to San Juan.
The new fare complements other daily commercial flights and charters operated by carriers such as Cape Air, Tradewind Aviation and Air Sunshine, Montañez said. EFE
Seaborne Airlines offers discount fare between Puerto Rico, Nevis
Saturday, January 24, 2015
The Week in Public Finance: Puerto Rico Update, a Comeback for Cities and Calls for Transparency
Great weather, bad finances
One of the last times I wrote about Puerto Rico, the island territory appeared headed in a good direction – it had completed a successful bond sale and Gov. Alejandro Garcia Padilla had submitted the first balanced budget in more than a decade. But it takes more than cash and budget cuts to fix an economy. An analysis by Moody’s this week documents the territory’s continued budget struggles. Moody’s reports that as of the end of 2014, the Government Development Bank’s (GDB) net cash had declined by about $460 million, or a whopping 30 percent, from a month earlier.The GDB is unique to Puerto Rico and essentially acts as the territory's banking institution. “The decline to $1.09 billion -- 17 percent below the GDB’s October liquidity projection -- underscores the continually growing liquidity pressures that the GDB and the Commonwealth of Puerto Rico, for which GDB serves as fiscal agent and fund repository, face,” Moody’s Jan. 23 analysis said.
And as for that balanced budget? For the first six months of the fiscal year, Puerto Rico’s revenues aren't hitting the mark: So far, the territory is falling 2.5 percent, or $96.5 million, below forecast. This makes it more likely the government will have to draw on the GDB’s cash to help meet its obligations, “an increasingly tenuous position given the GDB's own liquidity issues,” Moody’s said.
And as for that balanced budget? For the first six months of the fiscal year, Puerto Rico’s revenues aren't hitting the mark: So far, the territory is falling 2.5 percent, or $96.5 million, below forecast. This makes it more likely the government will have to draw on the GDB’s cash to help meet its obligations, “an increasingly tenuous position given the GDB's own liquidity issues,” Moody’s said.
A planned refinancing of about $2 billion in debt is key. Moody’s said that transaction would at least position the GDP to support the central government's cash needs and hopefully accommodate an increase in its own debt service, which jumps to $876 million in fiscal 2016 from $481 million this year.
However, recent years have marked a turnaround. For the first time in decades, the rate of population growth in some of America’s largest cities is outpacing suburban growth. This also means cities are enjoying growth in property values and government revenues -- both which help boost city credit quality. A paper released this week by Wells Fargo’s research team notes that 19 of the nation’s 50 largest cities showed gains in property values between 2010 and 2013 despite property value declines elsewhere in the country.
But will the trend last? The paper concluded that some metropolitan areas are really seeing a short-term population shift to the urban cores while others (likely ones that have growing knowledge-based economies) may be enjoying a long-term population renaissance. Research has shown that 35-to-44-year-olds with college degrees are flocking to places like San Francisco, Seattle, Austin, Portland and Washington D.C., “perhaps pointing to the possibility that the age group in their child-rearing years are choosing to remain in certain cities,” the Well Fargo paper said.
Is the rise of the city for real?
As population has declined in cities, one of the toughest finance problems for metropolitan centers has been how to keep paying for services for the swelled population during the day while taking in revenue from far fewer people on the whole. For example, Washington, D.C.’s daytime population swells well past 1 million people but the city only has about 640,000 residents.However, recent years have marked a turnaround. For the first time in decades, the rate of population growth in some of America’s largest cities is outpacing suburban growth. This also means cities are enjoying growth in property values and government revenues -- both which help boost city credit quality. A paper released this week by Wells Fargo’s research team notes that 19 of the nation’s 50 largest cities showed gains in property values between 2010 and 2013 despite property value declines elsewhere in the country.
But will the trend last? The paper concluded that some metropolitan areas are really seeing a short-term population shift to the urban cores while others (likely ones that have growing knowledge-based economies) may be enjoying a long-term population renaissance. Research has shown that 35-to-44-year-olds with college degrees are flocking to places like San Francisco, Seattle, Austin, Portland and Washington D.C., “perhaps pointing to the possibility that the age group in their child-rearing years are choosing to remain in certain cities,” the Well Fargo paper said.
Still, the biggest factors for whether this population group stays will be the ease of obtaining a mortgage, commute time (and cost of commute), mass transportation, and quality of schools, the paper said. In other words, the next decade should revel which way these young urban families are trending. Happy waiting.
“The MSRB believes that the availability of timely disclosure of additional debt in any form and debt-like obligations is essential to foster market transparency and to ensure a fair and efficient municipal market,” the letter said.
by Liz Farmer
The Week in Public Finance: Puerto Rico Update, a Comeback for Cities and Calls for Transparency
Opening the books (some more)
The Municipal Securities Rulemaking Board is urging the SEC to take a hard look at the current disclosure requirements in the municipal securities market with an eye toward the increasing practice of bank borrowing by government issuers. Currently, governments are not required to immediately disclose their direct borrowing deals with banks although some use the MSRB’s online reporting database to do so anyway. The MSRB’s letter encourages the Securities and Exchange Commission to look to its disclosure standards for the corporate market as a precedent for governments' disclosure of alternate financing deals like bank loans.“The MSRB believes that the availability of timely disclosure of additional debt in any form and debt-like obligations is essential to foster market transparency and to ensure a fair and efficient municipal market,” the letter said.
by Liz Farmer
The Week in Public Finance: Puerto Rico Update, a Comeback for Cities and Calls for Transparency
Wednesday, January 21, 2015
Puerto Rican Employer Saves $3.5 Million in Punitive Damages due to Anti-Discrimination and Anti-Retaliation Policies
On January 7, 2015, the U.S. District Court for the District of Puerto Rico issued an opinion overturning a jury’s $3.5 million punitive damages award for retaliation claims brought under Title VII and Puerto Rico law, finding that the defendant employer had demonstrated that it had made good faith efforts to implement anti-discrimination and anti-retaliation policies Wirshing v. Banco Santander de Puerto Rico, et al. Policies. , No. 3:11-cv-02073-GAG (D.P.R. Jan. 7, 2015).
Plaintiff Rose Marie Wirshing worked as a Product Manager at Banco Santander beginning in 2007. In this lawsuit, she alleged that her direct supervisor sexually harassed her, and that such harassment continued despite complaints she made to Human Resources. Wirshing also alleged that following her complaint, she was subjected to a campaign of retaliation, including threats that she would lose her job. A jury found in favor of Wirshing, and awarded her $351,018.34 in compensatory damages and $3.5 million in punitive damages.
On defendant’s post-trial motion for a remittitur, the court upheld the compensatory damages award (allocating all but $1 of the award to Wirshing’s claim under Puerto Rico law in order to comply with the cap on damages under Title VII) and vacated the punitive damages award. As to punitive damages, the court found that a punitive damages award was not warranted because defendant exercised good faith efforts to implement anti-discrimination and anti-retaliation policies. Although the jury had found that defendant’s policies were ineffective, the court noted that the “ineffectiveness of Defendant’s policy . . . cannot alone demonstrate a lack of good faith justifying an award of punitive damages.” As evidence of defendant’s good faith efforts, the court pointed to the fact that defendant’s policies were given to new employees, republished annually, and refreshed through annual trainings, as well as evidence of its procedures for handling complaints and its thorough investigations of plaintiff’s complaints. According to the court, defendant “did more than merely publish an official policy and passively implement such in an attempt to comply with Title VII’s requirements.”
While the appropriateness of punitive damages will turn on the specific facts of the case, the Wirshing decision highlights the importance of having anti-discrimination and anti-retaliation policies in place; providing a complaint procedure for employees to follow; and ensuring that employees receive training on the policies.
© 2015 Proskauer Rose LLP.
Puerto Rican Employer Saves $3.5 Million in Punitive Damages due to Anti-Discrimination and Anti-Retaliation Policies
Tuesday, January 20, 2015
Sea Star, Crowley raise ante in Puerto Rico trade with new capacity
Sea Star Line and Crowley Maritime are adding container-on-barge capacity to the U.S. mainland-Puerto Rico trade lane that Jones Act competitor Horizon Lines exited at the end of December.
Crowley said it will add a flat-deck barge that will carry up to 400 forty-foot-equivalents between Jacksonville, Florida, and San Juan, and is increasing capacity 40 percent on its North Atlantic-San Juan service. Sea Star said it will move up the launch of a weekly barge service on that route to Jan. 22. The service, using two barges with combined 800-FEU capacity, previously had been set for a Jan. 29 launch.
The carriers are seeking market share left up for grabs by the withdrawal of Horizon, which discontinued its Puerto Rico service and is awaiting regulatory approval for the sale of its remaining Hawaii and Alaska services.
Horizon carried about 30 percent of the volume in the U.S. mainland-Puerto Rico trade, which in recent years has slumped in tandem with with the island’s stagnant economy and declining population.
The Puerto Rico market has been divided between the barge services of Crowley and Trailer Bridge, and the services of Horizon and Sea Star, which have used self-propelled ships.
Added barge competition from Sea Star and Crowley increases pressure on Trailer Bridge, which operates between Jacksonville and San Juan and is the market’s smallest carrier.
While adding container-on-barge capacity, Sea Star and Crowley are moving to replace older tonnage with new ships fueled by liquefied natural gas, which complies with newly stiffened emission rules.
TOTE, parent company of Sea Star, has ordered two LNG-powered vessels, each of which will have capacity of 3,100 twenty-foot-equivalent units.
“The new barge service will complement Sea Star Line's current two vessel calls per week and ultimately act as a bridge until the first of new Marlin Class vessels are delivered in October of this year," said Sea Star President Tim Nolan.
Crowley is building two vessels powered by liquefied natural gas to replace its 1970s-vintage triple-decked barges. The combination container/roll-on, roll-off ships will carry up to 2,400 TEUs and 400 vehicles.
Sea Star newly chartered barges will operate weekly, with departures from Jacksonville and San Juan every Thursday, with transit times of six days. The carrier said its barges are configured to carry dry and refrigerated containers. The carrier said it will add more than 2,300 pieces of equipment during the next month to support the additional capacity and bolster existing services.
Crowley’s additional barge will provide the carrier with a fourth weekly sailing between Jacksonville and San Juan. Crowley currently has six triple-deck ro-ro barges on the Jacksonville-San Juan route.
The carrier also is boosting capacity its weekly service Puerto Rico service from Pennsauken, New Jersey, across the Delaware River from Philadelphia, by replacing its existing 580-foot, triple-deck barges on that route with with larger, recently modified 730-foot, triple-deck barges.
Crowley said it will place the flat deck barge into service on a two-week rotation once it has been outfitted for container carriage.
To support the increased capacity in both services, Crowley will add over 6,000 pieces of cargo carrying equipment including a combination of dry and reefer containers and chassis.
“With the changes in the marketplace, we expect strong demand for space on our vessels, and we are stepping up to provide improved capacity, equipment and sailing frequency to benefit our customers,” said John Hourihan, senior vice president and general manager, Puerto Rico.
Sea Star, Crowley raise ante in Puerto Rico trade with new capacity | JOC.com
Cheaper oil muddies path to Puerto Rico power fix
(Reuters) - Tumbling oil prices may offer short-term relief to Puerto Rico's struggling electric power authority PREPA, but could embolden bondholders and muddy the utility's path to a long-term fix.
Crude's slide may give bondholders more sway in negotiating a restructuring of the utility because a sharp drop in its fuel costs gives them less reason to accept reduced debt repayments.
While fixing PREPA is seen as a key step in solving the troubled island's debt problems, cheaper oil could create the perception that the power authority may not need a broad, and expensive, overhaul.
"Bondholders may be emboldened, but on the other hand, the need for up-front capital may now be less," said restructuring expert Suzzanne Uhland, a partner at law firm O'Melveny & Myers, in San Francisco. She said low oil prices reduced the pressure on the power utility to diversify its fuel sources.
PREPA, the quasi-public provider of electricity to Puerto Rico's roughly 3.5 million residents, charges consumers around double the average customers pay in the U.S. mainland. With debt of around $9 billion, it is under pressure to convert to generally cheaper and cleaner natural gas.
However, oil's 60 percent slide since June means the savings are less obvious. U.S. natural gas prices have fallen around 40 percent in the same period. Some now question the benefits of such a conversion and are more concerned with persuading PREPA to use a potential oil windfall to service debt, sources on the creditor side say.
"Is natural gas really the best way to solve the problem?" said one person in the utility's creditor community. "We don't want (PREPA) to invest in big assets unnecessarily."
Some warn, however, that while forgoing the natural gas conversion could save significant upfront costs, it would leave the utility at risk if oil rises again. While the drop in prices should ultimately benefit PREPA, one source said, it may result in a less comprehensive restructuring than the utility may have initially expected.
Replacing the generation units could cost up to $4 billion, according to one hedge fund considering investing in PREPA. Other people in the discussions say the capital expenditure amount PREPA's chief restructuring officer, Lisa Donahue, could propose is not fixed yet, and could be as low as $2.5 billion.
PREPA did not immediately respond to a request for comment.
CONSUMER BENEFIT
The oil fall also raises a question whether to use the benefits to pay down debt or pass all the savings on to consumers. Donahue said in December that under PREPA'S current system, the impact of oil would be neutral.
"The price of oil is a direct pass through to customers," Donahue told a news conference. "You pay less for fuel upfront but bills are lower."
Some creditors may push for higher tariffs, with one source calling the current pricing structure “archaic.”
Donahue is yet to present a long-term plan for the utility. Last month she said it would take 10 years to turn around the utility, not the five years originally thought, as she presented a progress report which did not include recommendations.
"Donahue will recommend building completely new generation units, which is much more expensive, but is necessary because the current technology is just too old and inefficient," said the hedge fund.
Donahue has said the utility is examining multiple scenarios on how to improve generation, including retrofitting units, using dual fuel or buying units to increase efficiency.
Under a forbearance agreement with lenders and bondholders, the utility has until March 2 to form the debt restructuring plan. People close to the matter say that deadline could be extended. The hedge fund source cited June as a possible target.
BONDHOLDER SWAY
Under a typical restructuring, PREPA would be expected to try to finance the conversion to natural gas in part by reducing repayments to bondholders.
With oil prices high, PREPA had more leverage to justify a haircut, but the crude's slide may encourage some creditors to demand full payment.
"I assume bondholders try their best to flex their muscles after the oil price fall," said David Tawil, president of Maglan Capital, a hedge fund that specializes in distressed investments. Tawil sold out of his Puerto Rico exposure last year.
Eventually, a compromise may be possible. But the drop in oil prices mean sides could start further apart, say some insiders and experts, making for a longer, messier fight.
"The move in the price of oil absolutely should impact what's happening at the negotiating table," said one financial source. "The only thing that has changed in PREPA's negotiating is everything."
(Additional reporting by Reuters in San Juan; Editing by Tomasz Janowski)
By Nick Brown and Megan Davies
Cheaper oil muddies path to Puerto Rico power fix
Crude's slide may give bondholders more sway in negotiating a restructuring of the utility because a sharp drop in its fuel costs gives them less reason to accept reduced debt repayments.
While fixing PREPA is seen as a key step in solving the troubled island's debt problems, cheaper oil could create the perception that the power authority may not need a broad, and expensive, overhaul.
"Bondholders may be emboldened, but on the other hand, the need for up-front capital may now be less," said restructuring expert Suzzanne Uhland, a partner at law firm O'Melveny & Myers, in San Francisco. She said low oil prices reduced the pressure on the power utility to diversify its fuel sources.
PREPA, the quasi-public provider of electricity to Puerto Rico's roughly 3.5 million residents, charges consumers around double the average customers pay in the U.S. mainland. With debt of around $9 billion, it is under pressure to convert to generally cheaper and cleaner natural gas.
However, oil's 60 percent slide since June means the savings are less obvious. U.S. natural gas prices have fallen around 40 percent in the same period. Some now question the benefits of such a conversion and are more concerned with persuading PREPA to use a potential oil windfall to service debt, sources on the creditor side say.
"Is natural gas really the best way to solve the problem?" said one person in the utility's creditor community. "We don't want (PREPA) to invest in big assets unnecessarily."
Some warn, however, that while forgoing the natural gas conversion could save significant upfront costs, it would leave the utility at risk if oil rises again. While the drop in prices should ultimately benefit PREPA, one source said, it may result in a less comprehensive restructuring than the utility may have initially expected.
Replacing the generation units could cost up to $4 billion, according to one hedge fund considering investing in PREPA. Other people in the discussions say the capital expenditure amount PREPA's chief restructuring officer, Lisa Donahue, could propose is not fixed yet, and could be as low as $2.5 billion.
PREPA did not immediately respond to a request for comment.
CONSUMER BENEFIT
The oil fall also raises a question whether to use the benefits to pay down debt or pass all the savings on to consumers. Donahue said in December that under PREPA'S current system, the impact of oil would be neutral.
"The price of oil is a direct pass through to customers," Donahue told a news conference. "You pay less for fuel upfront but bills are lower."
Some creditors may push for higher tariffs, with one source calling the current pricing structure “archaic.”
Donahue is yet to present a long-term plan for the utility. Last month she said it would take 10 years to turn around the utility, not the five years originally thought, as she presented a progress report which did not include recommendations.
"Donahue will recommend building completely new generation units, which is much more expensive, but is necessary because the current technology is just too old and inefficient," said the hedge fund.
Donahue has said the utility is examining multiple scenarios on how to improve generation, including retrofitting units, using dual fuel or buying units to increase efficiency.
Under a forbearance agreement with lenders and bondholders, the utility has until March 2 to form the debt restructuring plan. People close to the matter say that deadline could be extended. The hedge fund source cited June as a possible target.
BONDHOLDER SWAY
Under a typical restructuring, PREPA would be expected to try to finance the conversion to natural gas in part by reducing repayments to bondholders.
With oil prices high, PREPA had more leverage to justify a haircut, but the crude's slide may encourage some creditors to demand full payment.
"I assume bondholders try their best to flex their muscles after the oil price fall," said David Tawil, president of Maglan Capital, a hedge fund that specializes in distressed investments. Tawil sold out of his Puerto Rico exposure last year.
Eventually, a compromise may be possible. But the drop in oil prices mean sides could start further apart, say some insiders and experts, making for a longer, messier fight.
"The move in the price of oil absolutely should impact what's happening at the negotiating table," said one financial source. "The only thing that has changed in PREPA's negotiating is everything."
(Additional reporting by Reuters in San Juan; Editing by Tomasz Janowski)
By Nick Brown and Megan Davies
Cheaper oil muddies path to Puerto Rico power fix
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