Puerto Rico regulators shut down Doral Bank on Friday, with Banco Popular taking over most of the operations of what once the U.S. territory's fourth largest bank.
Doral had $5.9 billion in total assets and $4.1 billion in total deposits.
"It is the largest bank failure in five years," David Barr, a spokesman for the Federal Deposit Insurance Corp., said by phone.
The FDIC, which is overseeing the shutdown and shift of operations, said Banco Popular will take over eight of Doral's 26 former branches and work with three other banks to operate the other 18 locations on the island. Banco Popular North America will operate Doral's three branches in New York City and Centennial Bank will take over its five branches in Florida.
Banco Popular is Puerto Rico's biggest bank. The deal to take on Doral's operations will increase its assets by about $2.5 billion, Popular CEO Richard Carrion said in a phone interview.
"This will provide stability to the financial system," he said. "It's a very important acquisition for us."
Doral struggled in recent years with shrinking assets, a multimillion-fraud case and a lengthy, and so far unsuccessful, legal fight with Puerto Rico's government trying to get back what it says was a $229 million tax overpayment.
Executives with the bank did not respond to a request for comment.
Doral opened in October 1981 and operated mainly as a mortgage lender, employing more than 1,000 people at the time of its closure. In 2007, it saw a $610 million recapitalization.
Its high-profile legal problems began in November 2010, when a federal grand jury indicted a former Doral employee and four associates on charges of fraud conspiracy. Then earlier this week, a federal grand jury indicted two people in a $2.3 million fraud case, including a former vice president of the bank's property and facilities department.
The bank also was the target of an FBI raid in late December, with agents targeting its information technology offices. U.S. Attorney Rosa Emilia Rodriguez said at the time that it might be related to a probe into the June 2011 killing of Maurice Spagnoletti, an executive vice president in charge of Doral's mortgage and banking operations.
Spagnoletti, 56, was fatally shot while driving home, and authorities said it seemed like a professional attack. The FBI is still investigating, and no arrests have been made.
The closure of Doral came two days after a Puerto Rico appeals court voided a deal between the bank and the island's government for repayment of $229 million that Doral said it overpaid in taxes. The government had canceled the agreement and Doral sued. The bank sought to challenge the appeals court ruling, but the island's Supreme Court said Friday that it would not hear Doral's appeal.
Barr said the FDIC will ask that all litigation be postponed by 90 days.
"Our main focus right now is reopening the bank under normal business hours for the customers," he said.
Doral joins other failed Puerto Rico-based banks including Westernbank Puerto Rico, Eurobank and R-G Premier Bank of Puerto Rico. They were all shut down in April 2010.
Puerto Rico's Doral bank closed by FDIC as Banco Popular steps in
Saturday, February 28, 2015
Puerto Rico power company delays debt restructuring plan
Puerto Rico’s heavily indebted public power company is asking creditors for more time to present its restructuring plan.
A company statement Friday says it has not finalized the plan that was scheduled to be released next month.
The Electric Energy Authority owes more than $9 billion and is still negotiating with creditors.
The announcement comes as Puerto Rico seeks to have its public corporations given protection under the federal bankruptcy code amid concerns that some public agencies could go bankrupt.
The U.S. territory is trying to reduce $73 billion in public debt, with public corporations accounting for nearly 40 percent of that amount.
Puerto Rico power company delays debt restructuring plan
A company statement Friday says it has not finalized the plan that was scheduled to be released next month.
The Electric Energy Authority owes more than $9 billion and is still negotiating with creditors.
The announcement comes as Puerto Rico seeks to have its public corporations given protection under the federal bankruptcy code amid concerns that some public agencies could go bankrupt.
The U.S. territory is trying to reduce $73 billion in public debt, with public corporations accounting for nearly 40 percent of that amount.
Puerto Rico power company delays debt restructuring plan
Youngstown News, Puerto Rico seeks protection of federal bankruptcy code
SAN JUAN, Puerto Rico (AP) — Puerto Rican officials today sought to convince U.S. legislators that the island's financially struggling public corporations should be allowed to restructure their debt under the federal bankruptcy code.The push comes after a federal judge ruled a local debt-restructuring law pushed through last year by Puerto Rico's governor was unconstitutional.Melba Acosta, president of Puerto Rico's Government Development Bank, was among those who testified before a U.S. House Judiciary Committee hearing in Washington."The fiscal and economic situation in Puerto Rico has reached a critical moment," she said. "If the public corporations default on their obligations and there is no clear legal regime, creditors may attempt to engage in a race to the courthouse."Puerto Rico's delegate to Congress, Pedro Pierluisi, has filed a bill seeking to allow the island's state-owned corporations to file for Chapter 9 bankruptcy if needed. It would not apply to debt issued directly by Puerto Rico's government.
Youngstown News, Puerto Rico seeks protection of federal bankruptcy code
Youngstown News, Puerto Rico seeks protection of federal bankruptcy code
Friday, February 27, 2015
Bondholders split on merits of Chapter 9 for Puerto Rico agencies
Bondholders are split on a proposed bill to give Puerto Rico's ailing public agencies a way to restructure debt under U.S. bankruptcy law, with some saying it would give confidence to the market and others arguing it is a "Wild West" solution.
The bill to give Puerto Rico's agencies the ability to file under Chapter 9 of the U.S. bankruptcy code - used by Detroit, Michigan, and Stockton, California - was proposed by the U.S. territory's representative to Congress, Democrat Pedro Pierluisi. It will be heard on Thursday.
"(It) would provide confidence to the municipal markets," said Morrison & Foerster partner Anthony Princi, in a letter distributed by Pierluisi ahead of the hearing. Princi represents a group of 32 institutions holding more than $4.2 billion in Puerto Rico debt.
FCO Advisors, an investment firm with exposure to Puerto Rico, said the consensus from numerous mutual funds, hedge funds and financial institutions was "that the approach is valid and merits consideration."
However, Thomas Mayer, a partner at Kramer Levin, who represents funds managed by Franklin Municipal Bond Group and OppenheimerFunds Inc in respect to their investment in $1.6 billion of Puerto Rico's electric utility PREPA bonds, said use of Chapter 9 will cause more harm than good.
PREPA is in dire shape, laden with about $9 billion in debt and already deep in restructuring negotiations with bondholders. Using Chapter 9 would force bondholders to shoulder the burden of PREPA's operational failures and Puerto Rico's fiscal irresponsibility, Mayer said.
"Chapter 9 is the Wild West," Mayer's testimony said. "The only certainty is that Chapter 9 takes a long time - at least 18 months to three years - and is very expensive."
Pierluisi has argued that the bill would be in the best interests of all stakeholders, including creditors.
"So far as I can tell, the opposition to this bill comes from a very small subset of investment firms," said Pierluisi. "I hope that Congress will not allow such objections to frustrate forward movement on this widely-supported bill."
Discussion about the bill was reignited when a federal court on Feb. 6 struck down a local law enacted by the Caribbean island granting agencies similar debt-restructuring authority.
Puerto Rico's Government Development Bank said Chapter 9 would be a "useful tool for Puerto Rico's long-term economic success, whether or not it is actually invoked," according to testimony from GDB President Melba Acosta.
(Reporting by Megan Davies; Editing by Chris Reese)
Bondholders split on merits of Chapter 9 for Puerto Rico agencies
The bill to give Puerto Rico's agencies the ability to file under Chapter 9 of the U.S. bankruptcy code - used by Detroit, Michigan, and Stockton, California - was proposed by the U.S. territory's representative to Congress, Democrat Pedro Pierluisi. It will be heard on Thursday.
"(It) would provide confidence to the municipal markets," said Morrison & Foerster partner Anthony Princi, in a letter distributed by Pierluisi ahead of the hearing. Princi represents a group of 32 institutions holding more than $4.2 billion in Puerto Rico debt.
FCO Advisors, an investment firm with exposure to Puerto Rico, said the consensus from numerous mutual funds, hedge funds and financial institutions was "that the approach is valid and merits consideration."
However, Thomas Mayer, a partner at Kramer Levin, who represents funds managed by Franklin Municipal Bond Group and OppenheimerFunds Inc in respect to their investment in $1.6 billion of Puerto Rico's electric utility PREPA bonds, said use of Chapter 9 will cause more harm than good.
PREPA is in dire shape, laden with about $9 billion in debt and already deep in restructuring negotiations with bondholders. Using Chapter 9 would force bondholders to shoulder the burden of PREPA's operational failures and Puerto Rico's fiscal irresponsibility, Mayer said.
"Chapter 9 is the Wild West," Mayer's testimony said. "The only certainty is that Chapter 9 takes a long time - at least 18 months to three years - and is very expensive."
Pierluisi has argued that the bill would be in the best interests of all stakeholders, including creditors.
"So far as I can tell, the opposition to this bill comes from a very small subset of investment firms," said Pierluisi. "I hope that Congress will not allow such objections to frustrate forward movement on this widely-supported bill."
Discussion about the bill was reignited when a federal court on Feb. 6 struck down a local law enacted by the Caribbean island granting agencies similar debt-restructuring authority.
Puerto Rico's Government Development Bank said Chapter 9 would be a "useful tool for Puerto Rico's long-term economic success, whether or not it is actually invoked," according to testimony from GDB President Melba Acosta.
(Reporting by Megan Davies; Editing by Chris Reese)
Bondholders split on merits of Chapter 9 for Puerto Rico agencies
Can bankruptcy save Puerto Rico’s state-run corporations?
Puerto Rico is buried under at least $73 billion in debt that has left its economy in a near perpetual recession and caused a significant number of its residents to relocate to the mainland. Worse, the island’s status as a U.S. territory leaves it legally unable to reorganize its staggering debt in bankruptcy.
But a bill before Congress would change that—somewhat. The measure would give Puerto Rico’s state-run corporations, which provide crucial services such as water and electricity and are responsible for a sizable chunk of the government’s overall debt, the same bankruptcy protections enjoyed by cities throughout the United States.
Melba Acosta Febo, president of Puerto Rico’s Government Development Bank, told a House subcommittee Thursday that granting the island’s public corporations bankruptcy protection would be best for everyone involved. The corporations would not necessarily exercise the option, she cautioned, but if they did, debtors would face a clearer path than if the corporations simply run out of money. The island’s residents would not have to deal with a possible spike in already sky-high utility rates and possible interruptions of service that could result from the corporations toppling into receivership. Also, the future growth of the territory could be ensured by freeing up financing so the island could invest in more efficient power plants and other infrastructure.
Absent a way to reorganize its debt, the island is left in "an environment of uncertainty that makes it more difficult to address Puerto Rico’s fiscal challenges and threatens Puerto Rico’s economic future,” Acosta said.
Earlier this month, a federal judge threw out a local law that would have allowed Puerto Rico’s highway, water and power companies to restructure about $20 billion in debt. The ruling left the state-run firms without a clear way to reorganize if they went broke. Under current law, some corporations could be put in receivership, which Acosta called an untested and likely chaotic option. “That is not the best process,” she said. “Chapter 9 is a much better process that everyone knows.”
Chapter 9 has been used by small government entities such as hospital districts, and lately by major cities including Detroit and Stockton, Calif., to reorganize their debt.
The House bill would allow Puerto Rico’s public corporations to do the same. The measure, introduced by Pedro Pierluisi (D), Puerto Rico’s representative to Congress, drew sharp opposition from Thomas Mayer, who represents OppenheimerFunds Inc. and Franklin Municipal Bond Group, which hold Puerto Rican debt, said the measure would harm investors. He also said the process would be costly and take a long time to complete. There is no sense yet that the measure will go anywhere in Congress.
But supporters said Chapter 9 offers the best viable option for the island to break a cycle of high unemployment, low growth, and an extended economic malaise. "No decision has been made as to whether any public corporation intends to file under Chapter 9 were it to become available," Acosta said, adding that the process: "establishes a legal regime that is already understood by the capital markets, creditors, prospective lenders, and suppliers."
Read more:
Puerto Rico, with at least $70 billion in debt, confronts a rising economic misery
Puerto Rico bonds downgraded to junk levels
Policymakers in Puerto Rico's capital, San Juan, have struggled to deal with the country's massive debt. (AP Photo/Ricardo Arduengo)
Can bankruptcy save Puerto Rico’s state-run corporations?
But a bill before Congress would change that—somewhat. The measure would give Puerto Rico’s state-run corporations, which provide crucial services such as water and electricity and are responsible for a sizable chunk of the government’s overall debt, the same bankruptcy protections enjoyed by cities throughout the United States.
Melba Acosta Febo, president of Puerto Rico’s Government Development Bank, told a House subcommittee Thursday that granting the island’s public corporations bankruptcy protection would be best for everyone involved. The corporations would not necessarily exercise the option, she cautioned, but if they did, debtors would face a clearer path than if the corporations simply run out of money. The island’s residents would not have to deal with a possible spike in already sky-high utility rates and possible interruptions of service that could result from the corporations toppling into receivership. Also, the future growth of the territory could be ensured by freeing up financing so the island could invest in more efficient power plants and other infrastructure.
Absent a way to reorganize its debt, the island is left in "an environment of uncertainty that makes it more difficult to address Puerto Rico’s fiscal challenges and threatens Puerto Rico’s economic future,” Acosta said.
Earlier this month, a federal judge threw out a local law that would have allowed Puerto Rico’s highway, water and power companies to restructure about $20 billion in debt. The ruling left the state-run firms without a clear way to reorganize if they went broke. Under current law, some corporations could be put in receivership, which Acosta called an untested and likely chaotic option. “That is not the best process,” she said. “Chapter 9 is a much better process that everyone knows.”
Chapter 9 has been used by small government entities such as hospital districts, and lately by major cities including Detroit and Stockton, Calif., to reorganize their debt.
The House bill would allow Puerto Rico’s public corporations to do the same. The measure, introduced by Pedro Pierluisi (D), Puerto Rico’s representative to Congress, drew sharp opposition from Thomas Mayer, who represents OppenheimerFunds Inc. and Franklin Municipal Bond Group, which hold Puerto Rican debt, said the measure would harm investors. He also said the process would be costly and take a long time to complete. There is no sense yet that the measure will go anywhere in Congress.
But supporters said Chapter 9 offers the best viable option for the island to break a cycle of high unemployment, low growth, and an extended economic malaise. "No decision has been made as to whether any public corporation intends to file under Chapter 9 were it to become available," Acosta said, adding that the process: "establishes a legal regime that is already understood by the capital markets, creditors, prospective lenders, and suppliers."
Read more:
Puerto Rico, with at least $70 billion in debt, confronts a rising economic misery
Puerto Rico bonds downgraded to junk levels
Michael A. Fletcher is a national economics correspondent, writing about unemployment, state and municipal debt, the evolving job market and the auto industry.
Policymakers in Puerto Rico's capital, San Juan, have struggled to deal with the country's massive debt. (AP Photo/Ricardo Arduengo)
Can bankruptcy save Puerto Rico’s state-run corporations?
Thursday, February 26, 2015
Puerto Rico Welcomes Record Number of Cruise Ship Passengers
A record 17,847 cruise ship passengers are visiting the U.S. territory of Puerto Rico for the day.
Puerto Rico Welcomes Record Number of Cruise Ship Passengers
The executive subdirector of the island's tourism company says six cruise ships are docking Wednesday in historic Old San Juan.
Luis Muniz says the passengers are expected to generate some $2 million.
Puerto Rico earlier this year welcomed six cruise ships on two different days each for a total of roughly 16,000 passengers each time.
The island's government has been seeking to attract more cruise ships to help generate more revenue amid an eight-year recession.
Chapter 9 a 'Wild West' solution for Puerto Rico agencies -adviser
A proposed bill to give Puerto Rico's ailing public agencies a way to restructure debts under U.S. bankruptcy law is a "Wild West" solution that would likely hurt bondholders, an adviser for major investors argued in written testimony ahead of a key congressional committee.
The bill to give Puerto Rico's agencies the ability to file under Chapter 9 of the U.S.bankruptcy code - used by cities such as Detroit, Michigan, and Stockton, California - was proposed by the U.S. territory's representative to Congress, Democrat Pedro Pierluisi. It will be heard on Thursday.
"Use of Chapter 9 by any of Puerto Rico's public corporations will cause more harm than good, for both millions of Americans who invested in Puerto Rico bonds and for the Commonwealth," according to testimony from Thomas Mayer, a partner at Kramer Levin.
Mayer represents funds managed by Franklin Municipal Bond Group and OppenheimerFunds Inc in respect to their investment in $1.6 billion of bonds issued by Puerto Rico's electric utility, PREPA. PREPA is in dire shape, laden with about $9 billion in debt and already deep in restructuring negotiations with bondholders.
Using Chapter 9 would force bondholders to shoulder the burden of PREPA's operational failures and Puerto Rico's fiscal irresponsibility, Mayer said.
"Chapter 9 is the Wild West," Mayer's testimony said. "The only certainty is that Chapter 9 takes a long time - at least 18 months to three years - and is very expensive."
Pierluisi has argued that the bill empowers the Puerto Rico government to authorize its insolvent public corporations to use a "tried-and-true legal procedure" and would be in the best interests of all stakeholders, including creditors.
Discussion about the bill was reignited when a federal court on Feb. 6 struck down a local law enacted by the Caribbean island granting agencies similar debt-restructuring authority.
Puerto Rico's Government Development Bank, which finances many of the territory's official functions, said Chapter 9 would be a "useful tool for Puerto Rico's long-term economic success, whether or not it is actually invoked," according to testimony from GDB President Melba Acosta.
Acosta said Chapter 9 provides a legal regime already understood by the markets, creditors, prospective lenders and suppliers. (Reporting by Nick Brown and Megan Davies)
Chapter 9 a 'Wild West' solution for Puerto Rico agencies -adviser
Helping Puerto Rico Prosper - Bloomberg View
In an ideal world, Puerto Rico would be bankrupt. Instead, it is sliding toward something far more dangerous and uncertain -- and President Barack Obama and Congress need to intervene.
On Thursday, the House Judiciary Committee is taking up a long-shot bill to allow the island's public-sector corporations to declare bankruptcy. Providing these protections isn’t any kind of a bailout. It will just help Puerto Rico’s government begin to ease a debt-servicing burden that consumes 16 percent of its budget. It will also ensure that not just the biggest or loudest creditors get paid.
This crisis has been a long time brewing. Since 2006, Puerto Rico's economy has contracted every year but one. Its unemployment rate of 13.7 percent is double that of the U.S. mainland; its poverty rate is twice that of Mississippi. Meanwhile, Puerto Rico's population and tax base have aged and shrunk. Since 2000, public debt has risen from 60 percent of gross domestic product to more than 100 percent. Much of that has been racked up by the island's inefficient public-sector corporations.
Earlier this month, however, a U.S. federal court struck down a Puerto Rican law that would let its ailing power, water and highway authorities restructure their debts. Then Standard & Poor's downgraded the commonwealth's debt deeper into junk status. Both actions will make it more expensive for Puerto Rico to keep selling bonds to finance its $73 billion in public borrowing -- well over double the $29 billion owed by New York, the most indebted U.S. state, which has five times Puerto Rico's population. Moody’s Investor Service now puts a high probability on a Puerto Rican default in the next two years.
The tax-free status of Puerto Rico's securities has long appealed to investors in municipal bond funds. Offering progressively higher yields, the government has used bonds to bridge budget deficits and to keep the lights on and the water flowing. Now, in a form of tax peonage, it's securing high-yield bond sales to hedge funds and buyers of distressed debt with the promise of dedicated future revenues from new taxes.
As neither a U.S. state nor a nation, Puerto Rico is "one of the few places in the world where finances are not regularly surveyed by a public agency," the New York Federal Reserve Bank observed last year. Yet being a commonwealth is no inoculation from Stein’s Law: “If something cannot go on forever, it will stop.” Shrinking Puerto Rico’s debt will require running a budget surplus for years and an economy that grows at a nominal rate consistently higher than the interest rate on Puerto Rico’s debt. Neither is likely.
That leaves debt restructuring, and there’s the rub: Because Puerto Rico isn’t a state, it can’t avail itself of the provisions in federal bankruptcy law that enabled Detroit to restructure its debt in an orderly fashion.
That's what the bill in Congress would do. The Obama administration can help by working with Congress to deliver the island from the crushing burden of laws and regulations ill-suited to its circumstances. The federal minimum wage, for instance, puts Puerto Rico at a competitive disadvantage to its Caribbean neighbors, while the antiquated Jones Act forces Puerto Rico to use expensive U.S. ships for the transport of goods to and from the mainland.
Such regulatory and legal oddities are the product of the island’s century-plus status limbo. So, in some ways, is Puerto Rico’s debt crisis. Sooner or later, Puerto Rico’s inhabitants will have to decide their island’s future destiny. They should be allowed to do so standing up, not on their knees begging for fiscal mercy.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.
Helping Puerto Rico Prosper
On Thursday, the House Judiciary Committee is taking up a long-shot bill to allow the island's public-sector corporations to declare bankruptcy. Providing these protections isn’t any kind of a bailout. It will just help Puerto Rico’s government begin to ease a debt-servicing burden that consumes 16 percent of its budget. It will also ensure that not just the biggest or loudest creditors get paid.
This crisis has been a long time brewing. Since 2006, Puerto Rico's economy has contracted every year but one. Its unemployment rate of 13.7 percent is double that of the U.S. mainland; its poverty rate is twice that of Mississippi. Meanwhile, Puerto Rico's population and tax base have aged and shrunk. Since 2000, public debt has risen from 60 percent of gross domestic product to more than 100 percent. Much of that has been racked up by the island's inefficient public-sector corporations.
Earlier this month, however, a U.S. federal court struck down a Puerto Rican law that would let its ailing power, water and highway authorities restructure their debts. Then Standard & Poor's downgraded the commonwealth's debt deeper into junk status. Both actions will make it more expensive for Puerto Rico to keep selling bonds to finance its $73 billion in public borrowing -- well over double the $29 billion owed by New York, the most indebted U.S. state, which has five times Puerto Rico's population. Moody’s Investor Service now puts a high probability on a Puerto Rican default in the next two years.
The tax-free status of Puerto Rico's securities has long appealed to investors in municipal bond funds. Offering progressively higher yields, the government has used bonds to bridge budget deficits and to keep the lights on and the water flowing. Now, in a form of tax peonage, it's securing high-yield bond sales to hedge funds and buyers of distressed debt with the promise of dedicated future revenues from new taxes.
As neither a U.S. state nor a nation, Puerto Rico is "one of the few places in the world where finances are not regularly surveyed by a public agency," the New York Federal Reserve Bank observed last year. Yet being a commonwealth is no inoculation from Stein’s Law: “If something cannot go on forever, it will stop.” Shrinking Puerto Rico’s debt will require running a budget surplus for years and an economy that grows at a nominal rate consistently higher than the interest rate on Puerto Rico’s debt. Neither is likely.
That leaves debt restructuring, and there’s the rub: Because Puerto Rico isn’t a state, it can’t avail itself of the provisions in federal bankruptcy law that enabled Detroit to restructure its debt in an orderly fashion.
That's what the bill in Congress would do. The Obama administration can help by working with Congress to deliver the island from the crushing burden of laws and regulations ill-suited to its circumstances. The federal minimum wage, for instance, puts Puerto Rico at a competitive disadvantage to its Caribbean neighbors, while the antiquated Jones Act forces Puerto Rico to use expensive U.S. ships for the transport of goods to and from the mainland.
Such regulatory and legal oddities are the product of the island’s century-plus status limbo. So, in some ways, is Puerto Rico’s debt crisis. Sooner or later, Puerto Rico’s inhabitants will have to decide their island’s future destiny. They should be allowed to do so standing up, not on their knees begging for fiscal mercy.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.
Helping Puerto Rico Prosper
Tuesday, February 24, 2015
The engine of Puerto Rico’s economic renewal will be powered by innovation and re-invention | The U.S. Small Business Administration | SBA.gov
Last week, for personal reasons, I visited Puerto Rico and also had the chance to meet with one of our Growth Accelerator Fund competition winners, Piloto151.
But before I tell you about my visit with Piloto151, let me tell you about Puerto Rico, a Commonwealth of the United States. It will sound bad for a second, but there is an amazing silver lining. The island's economy has been in contraction for years, in fact it has been one of the fastest contracting economies in the planet. Its debt per capita is the highest in the country, unemployment levels also the highest and its average income is much lower than that of Mississippi, the state with the lowest average personal income. Stating the obvious, its population is practically 100% Hispanic, a large slice of the underserved. There is no doubt that the Great Recession brutally ravaged the Puerto Rican economy, but what I saw at Piloto151 gives me serious cause for hope, celebration and opportunity.
As important as large institutions are, times are changing at neck-breaking speed. Small businesses are taking the lead, outpacing innovation rates of large companies and hence creating the vast majority of net new jobs. American entrepreneurship is rooted in powerful renewal and continuous invention and reinvention. The SBA is determined to help develop and enhance inclusive and effective paths for entrepreneurship given its importance to economic growth and our country maintaining its competitive edge.
The Growth Accelerator Fund competition’s fifty $50,000 cash prize winners (see sba.gov/accelerators for more information) were nothing short of astounding, especially since 832 applications were received - Piloto151 was one of the winners. The prizes are meant to assist accelerators fund their operations and give them more capacity to scale up. The competition was designed to award capital to the best-in-class models while at the same time including a focus on geographic areas and sectors in which financing is in short supply, including models that are run by and/or support underrepresented groups.
I have seen this at work all over the country, most recently in San Juan. I sat down with about a dozen startups as well as the co-founder of Piloto151, Sofia Stolberg, for an impromptu fireside chat - even though it was 85 degrees and sunny. The companies were a mix of tech driven startups and established small businesses doing everything from building temporary disaster shelters to advising clients on communication strategies. The energy was infectious and what makes it all the more amazing is that they are keenly aware that their efforts in the burgeoning entrepreneurial ecosystem in the island will be a core part of it getting back on its feet. The challenge becomes them and the uphill run will make their collective entrepreneurial muscles stronger. We think the ecosystem continues to strengthen and Piloto151 is now part of a solid network of equally committed entrepreneurial ecosystems across the land.
Fueled by innovation with a dash of re-invention, the good work Piloto151 is enabling is key as Puerto Rico continues to plug away on its challenges. We will keep supporting innovative small businesses in this important journey, and like we say in our particular version of colloquial Spanish, "a meter mano gente."
By Javier.Saade
The engine of Puerto Rico’s economic renewal will be powered by innovation and re-invention | The U.S. Small Business Administration
But before I tell you about my visit with Piloto151, let me tell you about Puerto Rico, a Commonwealth of the United States. It will sound bad for a second, but there is an amazing silver lining. The island's economy has been in contraction for years, in fact it has been one of the fastest contracting economies in the planet. Its debt per capita is the highest in the country, unemployment levels also the highest and its average income is much lower than that of Mississippi, the state with the lowest average personal income. Stating the obvious, its population is practically 100% Hispanic, a large slice of the underserved. There is no doubt that the Great Recession brutally ravaged the Puerto Rican economy, but what I saw at Piloto151 gives me serious cause for hope, celebration and opportunity.
As important as large institutions are, times are changing at neck-breaking speed. Small businesses are taking the lead, outpacing innovation rates of large companies and hence creating the vast majority of net new jobs. American entrepreneurship is rooted in powerful renewal and continuous invention and reinvention. The SBA is determined to help develop and enhance inclusive and effective paths for entrepreneurship given its importance to economic growth and our country maintaining its competitive edge.
The Growth Accelerator Fund competition’s fifty $50,000 cash prize winners (see sba.gov/accelerators for more information) were nothing short of astounding, especially since 832 applications were received - Piloto151 was one of the winners. The prizes are meant to assist accelerators fund their operations and give them more capacity to scale up. The competition was designed to award capital to the best-in-class models while at the same time including a focus on geographic areas and sectors in which financing is in short supply, including models that are run by and/or support underrepresented groups.
I have seen this at work all over the country, most recently in San Juan. I sat down with about a dozen startups as well as the co-founder of Piloto151, Sofia Stolberg, for an impromptu fireside chat - even though it was 85 degrees and sunny. The companies were a mix of tech driven startups and established small businesses doing everything from building temporary disaster shelters to advising clients on communication strategies. The energy was infectious and what makes it all the more amazing is that they are keenly aware that their efforts in the burgeoning entrepreneurial ecosystem in the island will be a core part of it getting back on its feet. The challenge becomes them and the uphill run will make their collective entrepreneurial muscles stronger. We think the ecosystem continues to strengthen and Piloto151 is now part of a solid network of equally committed entrepreneurial ecosystems across the land.
Fueled by innovation with a dash of re-invention, the good work Piloto151 is enabling is key as Puerto Rico continues to plug away on its challenges. We will keep supporting innovative small businesses in this important journey, and like we say in our particular version of colloquial Spanish, "a meter mano gente."
About the Author:
Javier Saade
SBA Official Javier Saade is the Associate Administrator of the US Small Business Administration’s Office of Investment and Innovation.
The engine of Puerto Rico’s economic renewal will be powered by innovation and re-invention | The U.S. Small Business Administration
Opinion: Why you should do business in Puerto Rico
Today Puerto Rico kicked off the Site Selectors Guild’s 2015 Annual Conference, bringing together the world’s most respected business location experts and economic development professionals. Guild members specialize in advising companies on selecting the best location for their business, considering both qualitative and quantitative advantages that would maximize their performance and goals. The fact that Puerto Rico is hosting the Guild’s fourth annual conference is no coincidence – the island is experiencing a period of economic renaissance that is just beginning.
The García Padilla administration has driven the creation of new jobs in the private sector by attracting new capital investment from around the world and providing business incentives to local and foreign-owned businesses of all sizes. Thanks to the administration’s business-friendly policies, not only have the island’s historically strongest sectors – pharmaceuticals, biotechnology and medical devices – continued to stabilize and grow, but clusters of new industries such as aerospace are successfully developing, diversifying Puerto Rico’s economy. Just last year, Lufthansa Technik broke ground on a new maintenance, repair and overhaul facility on the island, which will have an estimated economic impact of $2.2 billion over a 30-year period and will employ up to 400 highly skilled employees.
This is just one of the several high profile companies in the aviation and aerospace sector that have recognized Puerto Rico’s advantages. Industry leaders such as Honeywell Aerospace, Infosys, Lockheed-Martin, ESSIG Research, Florida Turbine, Axon and UTC Aerospace Services are investing in Puerto Rico.
Governor García Padilla embraces the fact that the world is transitioning to a knowledge-based economy. That is why his administration has placed a premium on science, technology, engineering and math (STEM) education. The Lufthansa Technik facility is not only promoting the growth of Puerto Rico’s aerospace and aviation industry, it is further helping stimulate STEM education with the brand new Aerospace and Aviation Institute of Puerto Rico (AAIPR) that is currently under construction to support the Lufthansa Technik facility and operations.
Puerto Rico presents another tremendous advantage – its people. With 86 percent of our workforce enrolling in post-secondary education, our workforce is made up of highly educated, bilingual and quality conscious professionals who will guarantee Puerto Rico a seat at the global table. We have more than 40 academic institutions that provide graduate and post-graduate education, and an ecosystem that places an emphasis on research and development (R&D). Puerto Rico’s education system funds over a quarter of R&D projects on the Island. We have high rankings from the Global Competitiveness Index 2013 report for research and training services (ranked 10) and extent of staff training (ranked 18). In fact, the number of researchers in our labor force in 2009 (the last year data was available) surpassed that of many other Latin American countries, and even China.
Operating in Puerto Rico provides companies exemption on profits from U.S. federal taxes, while at the same time operating under American foreign trade zones and customs systems, and offering the same protections and benefits to businesses in the mainland. Our banking system is backed and regulated by the FDIC and we are protected under the Homeland Security Act. We are subject to the American legal framework, including its intellectual property protections, and more importantly, we are U.S. citizens.
The progress will continue as we advance on our economic development roadmap. This month, Dow AgroSciences announced the commencement of operations of a new multimillion dollar lab to research corn, soy, and sunflower. And companies like CooperVision and Lilly continue to invest more than $450 million in Puerto Rico. Hosting the Site Selectors Guild is a great honor because it gives us the opportunity to engage influential people in the reinvention of Puerto Rico as a global business metropolis. We welcome and invite them to make the smart move in a unique, reliable and vibrant investment destination.
Antonio Medina is the Executive Director of the Puerto Rico Industrial Development Company.
By Antonio MedinaThis month, Dow AgroSciences announced the commencement of operations of a new multimillion dollar lab to research corn, soy, and sunflower. And companies like CooperVision and Lilly continue to invest more than $450 million in Puerto Rico.- Antonio Medina
This is just one of the several high profile companies in the aviation and aerospace sector that have recognized Puerto Rico’s advantages. Industry leaders such as Honeywell Aerospace, Infosys, Lockheed-Martin, ESSIG Research, Florida Turbine, Axon and UTC Aerospace Services are investing in Puerto Rico.
Governor García Padilla embraces the fact that the world is transitioning to a knowledge-based economy. That is why his administration has placed a premium on science, technology, engineering and math (STEM) education. The Lufthansa Technik facility is not only promoting the growth of Puerto Rico’s aerospace and aviation industry, it is further helping stimulate STEM education with the brand new Aerospace and Aviation Institute of Puerto Rico (AAIPR) that is currently under construction to support the Lufthansa Technik facility and operations.
Puerto Rico presents another tremendous advantage – its people. With 86 percent of our workforce enrolling in post-secondary education, our workforce is made up of highly educated, bilingual and quality conscious professionals who will guarantee Puerto Rico a seat at the global table. We have more than 40 academic institutions that provide graduate and post-graduate education, and an ecosystem that places an emphasis on research and development (R&D). Puerto Rico’s education system funds over a quarter of R&D projects on the Island. We have high rankings from the Global Competitiveness Index 2013 report for research and training services (ranked 10) and extent of staff training (ranked 18). In fact, the number of researchers in our labor force in 2009 (the last year data was available) surpassed that of many other Latin American countries, and even China.
Operating in Puerto Rico provides companies exemption on profits from U.S. federal taxes, while at the same time operating under American foreign trade zones and customs systems, and offering the same protections and benefits to businesses in the mainland. Our banking system is backed and regulated by the FDIC and we are protected under the Homeland Security Act. We are subject to the American legal framework, including its intellectual property protections, and more importantly, we are U.S. citizens.
The progress will continue as we advance on our economic development roadmap. This month, Dow AgroSciences announced the commencement of operations of a new multimillion dollar lab to research corn, soy, and sunflower. And companies like CooperVision and Lilly continue to invest more than $450 million in Puerto Rico. Hosting the Site Selectors Guild is a great honor because it gives us the opportunity to engage influential people in the reinvention of Puerto Rico as a global business metropolis. We welcome and invite them to make the smart move in a unique, reliable and vibrant investment destination.
Antonio Medina is the Executive Director of the Puerto Rico Industrial Development Company.
Opinion: Why you should do business in Puerto Rico
Monday, February 23, 2015
FERC publishes Aguirre Gasport EIS, but financing challenges remain - Caribbean Business
The Federal Energy Regulatory Commission published the final environmental-impact statement (EIS) for the Aguirre Offshore Gasport on Friday, which sets a 90-day timeframe for final approval.
FERC publishes Aguirre Gasport EIS, but financing challenges remain
Despite the move, expected since last December, the $350 million project slated to play an important role in the Puerto Rico Electric Power Authority (Prepa) plan to transform its power production to natural gas from dirtier and more costly oil still faces financial hurdles.
“Construction and operation of the project would result in mostly temporary and short-term environmental impacts; however, some long-term and permanent environmental impacts would occur. The FERC staff concluded that approval of the proposed project, with the mitigation measures recommended in the EIS, would result in limited adverse environmental impacts,” FERC concluded.
The final EIS comes months after a draft EIS was published that was subjected to a public comment period.
Since that draft, the U.S. Department of Transportation (DOT)’s Pipeline and Hazardous Materials Safety Administration (PHMSA) said that a portion of the pipeline running through Jobos Bay didn’t comply with federal regulations requiring “burial below natural grade sea bottom or an alternative equivalent protection system from hazards.”
Texas-based developer Excelerate Energy, which is developing the project, modified the design to meet federal standards, according to FERC. The new plan will bury the offshore pipeline “to at least below natural bottom in some locations and to 3 feet to the top of the pipeline in other locations, with the exception of approximately 1,700 feet through the area across the Boca del Infierno pass,” where developers proposed a direct lay over the coral reef with protective concrete mats placed over the pipeline, according to FERC.
Daniel Hanson, an analyst at Height Securities in Washington, D.C., said that PHMSA, the Army Corps of Engineers and the U.S. Coast Guard may have some lingering concerns about the engineering rigor around the pipeline's proposed construction and believes Excelerate is “under pressure to convince FERC's conferring agencies that their plan for the pipeline is sufficient to ensure the safety of gas delivery even in severe and extreme weather conditions.”
Noting that pipeline and financing concerns could still scuttle the project, Hanson said construction wouldn’t begin until after September and the plant would not be operational until at least next spring.
Financing may be the bigger threat, however, to this vital Prepa infrastructure project. The financially battered government power utility, which is amid restructuring negotiations with its creditors, is still studying financing alternatives for the project, which is called the Aguirre Offshore Gasport. Prepa officials have said those options include a local bond issue via the Government Development Bank (GDB) or a public-private partnership (P3), but the financial constraints of Prepa and the GDB, both of which carry junk-bond ratings, will make both options more difficult.
Prepa Executive Director Juan Alicea Flores said recently that the utility’s first option for the project is to get federal government backing in the form of funding or a warranty.
As part of several contracts signed with Excelerate last March, Prepa is responsible for arranging the financing for the project, estimated to cost a total $350 million.
Excelerate itself may also lack the financial firepower to build the facility, as it has been having problems converting investment pledges into cash commitments, according to analysts.
With oil prices collapsing by about 50%, the company has put on hold plans to build an eight million-ton-per-annum liquefied natural gas export plant moored at Lavaca Bay, Texas, according to filings with FERC. Excelerate said the steep oil-price decline has forced it to make a “strategic reconsideration of the economic value of the project.”
By : JOHN MARINO“Construction and operation of the project would result in mostly temporary and short-term environmental impacts; however, some long-term and permanent environmental impacts would occur. The FERC staff concluded that approval of the proposed project, with the mitigation measures recommended in the EIS, would result in limited adverse environmental impacts,” FERC concluded.
The final EIS comes months after a draft EIS was published that was subjected to a public comment period.
Since that draft, the U.S. Department of Transportation (DOT)’s Pipeline and Hazardous Materials Safety Administration (PHMSA) said that a portion of the pipeline running through Jobos Bay didn’t comply with federal regulations requiring “burial below natural grade sea bottom or an alternative equivalent protection system from hazards.”
Texas-based developer Excelerate Energy, which is developing the project, modified the design to meet federal standards, according to FERC. The new plan will bury the offshore pipeline “to at least below natural bottom in some locations and to 3 feet to the top of the pipeline in other locations, with the exception of approximately 1,700 feet through the area across the Boca del Infierno pass,” where developers proposed a direct lay over the coral reef with protective concrete mats placed over the pipeline, according to FERC.
Daniel Hanson, an analyst at Height Securities in Washington, D.C., said that PHMSA, the Army Corps of Engineers and the U.S. Coast Guard may have some lingering concerns about the engineering rigor around the pipeline's proposed construction and believes Excelerate is “under pressure to convince FERC's conferring agencies that their plan for the pipeline is sufficient to ensure the safety of gas delivery even in severe and extreme weather conditions.”
Noting that pipeline and financing concerns could still scuttle the project, Hanson said construction wouldn’t begin until after September and the plant would not be operational until at least next spring.
Financing may be the bigger threat, however, to this vital Prepa infrastructure project. The financially battered government power utility, which is amid restructuring negotiations with its creditors, is still studying financing alternatives for the project, which is called the Aguirre Offshore Gasport. Prepa officials have said those options include a local bond issue via the Government Development Bank (GDB) or a public-private partnership (P3), but the financial constraints of Prepa and the GDB, both of which carry junk-bond ratings, will make both options more difficult.
Prepa Executive Director Juan Alicea Flores said recently that the utility’s first option for the project is to get federal government backing in the form of funding or a warranty.
As part of several contracts signed with Excelerate last March, Prepa is responsible for arranging the financing for the project, estimated to cost a total $350 million.
Excelerate itself may also lack the financial firepower to build the facility, as it has been having problems converting investment pledges into cash commitments, according to analysts.
With oil prices collapsing by about 50%, the company has put on hold plans to build an eight million-ton-per-annum liquefied natural gas export plant moored at Lavaca Bay, Texas, according to filings with FERC. Excelerate said the steep oil-price decline has forced it to make a “strategic reconsideration of the economic value of the project.”
FERC publishes Aguirre Gasport EIS, but financing challenges remain
Saturday, February 21, 2015
Coca-Cola Puerto Rico Features Emoji-Based URLs in Latest Ad Campaign
Coca-Cola drew a lot of interesting controversy during the Super Bowl with its anti-cyberbullying ad. While the #makeithappy ad campaign was well-intentioned, it left a weird taste in consumers' mouths.
However, emojis aren't compatible with the standard URL, such as .com, .net or .org. So Coca-Cola's advertising agency chose an unorthodox domain; .WS. According to the agency, "we opted to go with the .ws because the letters could stand for 'We smile' and hence seemed most relevant to the brand."
But why consider using emojis on a URL at all?
"The vast majority of our audience now visits our site via a mobile device. And since emojis have become a kind of second language for Coke's younger consumers, we felt this was a great opportunity to connect on a deeper level with our most important demographic," Coca-Cola Puerto Rico President Alejandro Gomez told AdWeek.
Coca-Cola Puerto Rico Features Emoji-Based URLs in Latest Ad Campaign
(Photo : Coca-Cola/Screenshot) After the mixed response to the #makeithappy campaign, Coca-Cola is pursuing a new idea for its ads.
But why consider using emojis on a URL at all?
"The vast majority of our audience now visits our site via a mobile device. And since emojis have become a kind of second language for Coke's younger consumers, we felt this was a great opportunity to connect on a deeper level with our most important demographic," Coca-Cola Puerto Rico President Alejandro Gomez told AdWeek.
After the mixed response to the #makeithappy campaign, Coca-Cola is pursuing a new idea for its ads. (Photo : Flickr)
By Christopher Hutton Coca-Cola Puerto Rico Features Emoji-Based URLs in Latest Ad Campaign
FERC Staff OKs Offshore LNG Port For Puerto Rico Power Plant | 2015-02-20 | Natural Gas Intelligence
FERC staff has issued a favorable final environmental impact statement (FEIS) for the Aguirre Offshore GasPort Project to serve the Puerto Rico Electric Power Authority (PREPA) with liquefied natural gas (LNG) receipt, storage and regasification.
The project is proposed by Aguirre Offshore GasPort LLC, a unit of Excelerate Energy LP, and would serve PREPA's existing Aguirre Power Complex in Salinas, Puerto Rico (see Daily GPI, Aug. 7, 2014).
The project would include the construction and operation of an offshore marine LNG receiving facility and a four-mile subsea pipeline connecting the Offshore GasPort to the Aguirre Plant. A floating storage and regasification unit would be moored at the offshore berthing platform on a semi-permanent basis, according to the Federal Energy Regulatory Commission [CP13-193].
The port would be about three miles off the southern coast of Puerto Rico, about one mile outside of Jobos Bay and near the towns of Salinas and Guayama.
Availability of regasified LNG would allow the power plant to have dual-fuel generating capability by burning either natural gas or diesel for its combined-cycle units and fuel oil/natural gas for the thermoelectric plant.
"The project would contribute to the diversification of energy sources in Puerto Rico, allow the Aguirre Plant to meet the requirements of the [U.S. Environmental Protection Agency's] Mercury and Air Toxics Standard rule, reduce fuel oil barge traffic in Jobos Bay, and contribute to energy price stabilization in the region," the FEIS said. "Aguirre LLC is proposing to place the project facilities in service in 2016."
According to the project's website, "PREPA recognizes the urgent need to reduce the dependence on oil and increase the use of natural gas to stimulate economic development, attract industries, improve the quality of life and create more jobs on the island. Using natural gas at the Aguirre Power Plant will reduce the cost of fuel at the plant, a move that could result in cheaper electricity for the entire island.
"The Aguirre Power Plant was selected because it has the largest power-generation capacity on the island and highest fuel cost of all PREPA's facilities. Converting the Plant to natural gas will yield the most savings to the island."
A U.S. Energy Information Administration (EIA) report from 2013 said Puerto Rico does not produce natural gas, and all gas is imported as LNG through the Penuelas terminal and regasification facility at Guayanilla Bay. This facility was built to supply the 540 MW EcoElectrica generating plant on the southwestern coast. LNG for Puerto Rico is imported mainly from Trinidad and Tobago, according to EIA. Puerto Rico's per capita natural gas consumption is less than one-tenth of the U.S. average, according to EIA. The Aguirre Offshore GasPort would be Puerto Rico's second such facility.
FERC staff found that the project would have "limited adverse environmental impacts that would mostly occur during construction, provided the subsea pipeline does not cross the Boca del Infierno pass via a direct lay."
The project is proposed by Aguirre Offshore GasPort LLC, a unit of Excelerate Energy LP, and would serve PREPA's existing Aguirre Power Complex in Salinas, Puerto Rico (see Daily GPI, Aug. 7, 2014).
The project would include the construction and operation of an offshore marine LNG receiving facility and a four-mile subsea pipeline connecting the Offshore GasPort to the Aguirre Plant. A floating storage and regasification unit would be moored at the offshore berthing platform on a semi-permanent basis, according to the Federal Energy Regulatory Commission [CP13-193].
The port would be about three miles off the southern coast of Puerto Rico, about one mile outside of Jobos Bay and near the towns of Salinas and Guayama.
Availability of regasified LNG would allow the power plant to have dual-fuel generating capability by burning either natural gas or diesel for its combined-cycle units and fuel oil/natural gas for the thermoelectric plant.
"The project would contribute to the diversification of energy sources in Puerto Rico, allow the Aguirre Plant to meet the requirements of the [U.S. Environmental Protection Agency's] Mercury and Air Toxics Standard rule, reduce fuel oil barge traffic in Jobos Bay, and contribute to energy price stabilization in the region," the FEIS said. "Aguirre LLC is proposing to place the project facilities in service in 2016."
According to the project's website, "PREPA recognizes the urgent need to reduce the dependence on oil and increase the use of natural gas to stimulate economic development, attract industries, improve the quality of life and create more jobs on the island. Using natural gas at the Aguirre Power Plant will reduce the cost of fuel at the plant, a move that could result in cheaper electricity for the entire island.
"The Aguirre Power Plant was selected because it has the largest power-generation capacity on the island and highest fuel cost of all PREPA's facilities. Converting the Plant to natural gas will yield the most savings to the island."
A U.S. Energy Information Administration (EIA) report from 2013 said Puerto Rico does not produce natural gas, and all gas is imported as LNG through the Penuelas terminal and regasification facility at Guayanilla Bay. This facility was built to supply the 540 MW EcoElectrica generating plant on the southwestern coast. LNG for Puerto Rico is imported mainly from Trinidad and Tobago, according to EIA. Puerto Rico's per capita natural gas consumption is less than one-tenth of the U.S. average, according to EIA. The Aguirre Offshore GasPort would be Puerto Rico's second such facility.
FERC staff found that the project would have "limited adverse environmental impacts that would mostly occur during construction, provided the subsea pipeline does not cross the Boca del Infierno pass via a direct lay."
Yezz Supporting Project Ara’s Puerto Rico Pilot
Mobile device manufacturer Yezz announced that they are supporting Project Ara’s Puerto Rico pilot. Yezz is embracing Project Ara as it aligns with their “ambition and enthusiasm for fostering innovation.” Luis Sosa, co-founder of Yezz and CEO of DDM Brands, goes on to say:
by Jason Bouwmeester
Yezz Supporting Project Ara’s Puerto Rico Pilot | Techaeris
“Project Ara promotes interaction and participation of bright minds, working together for the development of a project that will change the industry forever, Project Ara is the perfect undertaking as it is a massive, technological revolution.”Be sure to check back as we’ll be following up with Yezz about Project Ara, amongst other things, at MWC 2015 in March.
by Jason Bouwmeester
Yezz Supporting Project Ara’s Puerto Rico Pilot | Techaeris
Friday, February 20, 2015
U.S. House panel plans hearing on Puerto Rico Chap. 9 act on Feb. 26-Pierluisi
A U.S. House subcommittee is to hold a hearing on February 26 on a bill that seeks to modify U.S. bankruptcy code to allow Puerto Rico's public entities to file under Chapter 9 of the code, the U.S. commonwealth's representative in Congress said on Thursday.
"The point of the hearing is to create a comprehensive record that will help the Committee's leadership determine whether to take the next step in the legislative process, which would be to hold a vote on the bill," said Pedro Pierluisi. (Reporting by Edward Krudy; Editing by Chizu Nomiyama)
U.S. House panel plans hearing on Puerto Rico Chap. 9 act on Feb. 26-Pierluisi
"The point of the hearing is to create a comprehensive record that will help the Committee's leadership determine whether to take the next step in the legislative process, which would be to hold a vote on the bill," said Pedro Pierluisi. (Reporting by Edward Krudy; Editing by Chizu Nomiyama)
U.S. House panel plans hearing on Puerto Rico Chap. 9 act on Feb. 26-Pierluisi
Wednesday, February 18, 2015
Puerto Rico's government bank posts improved liquidity in January
Feb 17 (Reuters) - The liquidity position of Puerto Rico's Government Development Bank rose nearly 10 percent to $1.194 billion in January, according to a filing from the U.S. commonwealth's financing arm late on Friday.
The improvement comes after a 30 percent drop to $1.09 billion from November to December. Puerto Rico is trying to complete a bond deal of at least $2 billion in March or early April that would help strengthen the GDB's position. (Reporting by Edward Krudy; Editing by Lisa Von Ahn)
Puerto Rico's government bank posts improved liquidity in January
The improvement comes after a 30 percent drop to $1.09 billion from November to December. Puerto Rico is trying to complete a bond deal of at least $2 billion in March or early April that would help strengthen the GDB's position. (Reporting by Edward Krudy; Editing by Lisa Von Ahn)
Puerto Rico's government bank posts improved liquidity in January
Puerto Rico Banktruptcy News: Bankrupt US Commonwealth Seeking Help With Debts With New Bill
Puerto Rico's struggling public agencies may get some aid in facing their massive debts thanks to a United States bankruptcy law.
According to Reuters, the island nation and U.S. territory's representative to Congress, which is a non-voting member of Congress, Democrat Pedro Pierluisi, sponsored a bill that will allow Puerto Rico's power, water and highway authorities to reorganize under Chapter 9 of the U.S. Bankruptcy Code.
Puerto Rico's power authority, Prepa, is in the worst shape, currently drowning in about $9 billion in debt. It is already restructuring negotiations with bondholders.
The island's overall debt currently hovers around $70 billion and has been immersed in recession for years.
The House Judiciary Committee, chaired by Rep. Bob Goodlatte, has plans to hear the bill in the coming weeks offering hope to Puerto Rico's businesses.
Pierluisi introduced the bill last July after lawmakers in Puerto Rico enacted legislation allowing public agencies similar debt-restructuring power. The nation's governor Alejandro Padilla passed the Recovery Act last June. However, on Feb. 6 a federal judge overturned that plan, which would have allowed company's like Puerto Rico's Prepa to negotiate with bondholders to reduce large debt loads.
According to Financial Times, S&P also lowered Puerto Rico's GO debt rating from BB to B on Feb. 12. The rating agency said the island's "potential inability to pay its debts, after persistent economic weakness has chipped away at revenues over many years."
Unlike other U.S. municipalities, the constitution prevents the government and public companies from seeking protection from creditors in bankruptcy courts.
Pierluisi now says Puerto Rico should focus on putting in effort to ensure it has access to Chapter 9, rather than working to enact a local bankruptcy law.
Despite receiving news that the committee will give the bill a hearing, analysts say with a Republican-led Congress, no one should be to optimistic.
Puerto Rico Banktruptcy News: Bankrupt US Commonwealth Seeking Help With Debts With New Bill
Puerto Rico's power authority, Prepa, is in the worst shape, currently drowning in about $9 billion in debt. It is already restructuring negotiations with bondholders.
The island's overall debt currently hovers around $70 billion and has been immersed in recession for years.
The House Judiciary Committee, chaired by Rep. Bob Goodlatte, has plans to hear the bill in the coming weeks offering hope to Puerto Rico's businesses.
Pierluisi introduced the bill last July after lawmakers in Puerto Rico enacted legislation allowing public agencies similar debt-restructuring power. The nation's governor Alejandro Padilla passed the Recovery Act last June. However, on Feb. 6 a federal judge overturned that plan, which would have allowed company's like Puerto Rico's Prepa to negotiate with bondholders to reduce large debt loads.
According to Financial Times, S&P also lowered Puerto Rico's GO debt rating from BB to B on Feb. 12. The rating agency said the island's "potential inability to pay its debts, after persistent economic weakness has chipped away at revenues over many years."
Unlike other U.S. municipalities, the constitution prevents the government and public companies from seeking protection from creditors in bankruptcy courts.
Pierluisi now says Puerto Rico should focus on putting in effort to ensure it has access to Chapter 9, rather than working to enact a local bankruptcy law.
Despite receiving news that the committee will give the bill a hearing, analysts say with a Republican-led Congress, no one should be to optimistic.
Puerto Rico's debt crisis leaves many unemployed. (Photo : Getty Images)
By Jaclyn DiazPuerto Rico Banktruptcy News: Bankrupt US Commonwealth Seeking Help With Debts With New Bill
Tuesday, February 17, 2015
Puerto Rico's bid to become New Age tax haven explored
An article in Forbes with worldwide readership states that as the U.S. Treasury Department continues to tighten its noose around offshore accounts, a new tax haven has sprung up under its nose in the Caribbean. Welcome to Puerto Rico–island of tropical breezes, and (for new arrivals only) a 0% tax rate on certain dividends, interest and capital gains.
Puerto Rico's bid to become New Age tax haven explored
Puerto Rico is about the same size as Connecticut but with more palm trees, twice the unemployment rate, a third the median household income and a tiny fraction of the hedge funds–a deficiency the financially teetering territory aims to correct by turning itself into a refuge for tax-oppressed millionaires and billionaires.
Yes, this is legal. While the U.S. asserts a sweeping right to tax citizens’ income wherever they live and wherever it’s earned, Section 933 of the tax code exempts residents of Puerto Rico from paying U.S. income tax on their Puerto Rico-sourced income. Instead, the Commonwealth of Puerto Rico has the exclusive right to tax local income as it sees fit.
“The way the U.S. tax code is written, I could be on Mars and be taxed on intergalactic income but not if I’m sitting on this island in the Caribbean. It’s kind of in a twilight zone,” marvels Irvine, Calif. money manager Mohnish Pabrai.
To exploit this special status and help rescue its economy, Puerto Rico’s Legislative Assembly adopted two laws in 2012 and expanded them last year. Act 20 entices hedge funds, family offices, professional service firms and even software developers to locate there by taxing their corporate profits from exported services at a flat 4% rate and allowing those profits to be paid out to the owners free of Puerto Rico income tax. So far the government has okayed 346 export companies, with 400 approvals expected this year.
Pabrai used Act 20 to set up a new private equity venture in Puerto Rico last year and figures he’ll save as much as $10 million in tax a year, as well as half a million in operating costs. (There’s an abundance of educated Puerto Ricans ready to work for less than their California counterparts. Office space is cheaper, too.)
Act 22 grants new Puerto Rico residents (including, after a recent amendment, returning Puerto Ricans who left before 2006) a 0% rate on locally sourced interest and dividends as well as all capital gains accrued after they become residents, a particular benefit for active traders. So far 509 tax refugees have been granted Act 22 status and another 600 will get it this year, Puerto Rico’s Department of Economic Development & Commerce projects.
Puerto Rico? Really? When the property crime rate in the San Juan metropolitan area is six times that of the New York City area?
It depends on how you want your pocket picked. Since 2013, when rate hikes on the wealthy and a 3.8% ObamaCare tax on net investment income both kicked in, the top effective combined federal and state tax rate on long-term capital gains and qualified dividends has been 32.7% for New York City residents, 33% in California and 29% in Connecticut. On short-term gains and taxable interest it’s now a hefty 52.3% in NYC, 52.6% in California and 48.6% in Connecticut.
Sadly, moving to Puerto Rico won’t buy you a total dispensation from the Internal Revenue Service. Uncle Sam still wants his cut on dividends you receive from U.S. public companies, profits from mainland private businesses, pensions and deferred compensation earned in the states, and Social Security benefits.
Plus, any unrealized capital gain accrued before you moved to Puerto Ric–say, on that Apple stock you bought for a split-adjusted $10 a share–is subject to U.S. tax if you sell within ten years after your move. During that period Puerto Rico will also impose a 10% tax on your pre-move gains, which gets credited against what you owe Uncle Sam. After ten years the U.S tax on preexisting gains disappears and the Puerto Rican bite drops to just 5%.
This is a much sweeter deal than you can get these days by renouncing U.S. citizenship. In 2008, after years of stories in FORBES and elsewhere about billionaire tax expatriates, including Campbell Soup heir John Dorrance and Styrofoam cup heir Kenneth Dart, Congress decided that anyone worth more than $2 million would have to pay taxes on unrealized gains above a certain amount ($690,000 for 2015) when giving up citizenship–just as if they’d sold all their assets.
If you take up residence in Puerto Rico, you get to keep your citizenship and the dollars in your wallet and you don’t have to ante up any U.S. gains tax unless you sell within the next ten years.
Make no mistake: To benefit from Act 22 you must become a bona fide Puerto Rico resident, which means being on the island at least 183 days a year. You can’t just rent a post office box in San Juan and call it “home” while keeping a $5 million house and your ties back in the States. Your business, family, bank and brokerage accounts, driver’s license and yacht should all move with you to the island.
But you don’t really have to spend 183 full days in Puerto Rico. “If you arrive at 11:59 at night that is counted as a day in Puerto Rico,” says San Juan tax attorney Edgar Rios-Mendez. Conveniently, San Juan is 3 1/2 hours or less by private jet from New York’s LaGuardia Airport.
(Be careful. Remember, you must convince not only Puerto Rico’s friendly officials that your residence is on the island but also the possibly hostile auditors from the high-tax jurisdiction you’ve just fled–and they, too, can count partial days to claim you as a resident.)
Pabrai considers the Act 22 personal tax deal so good that he’s surprised thousands of rich Americans haven’t already moved to Puerto Rico. Yet he himself has not for the sort of personal reason that could be holding others back, too: His wife, Harina Kapoor, started and runs a solar energy company and a yoga studio in California and understandably doesn’t want to go.
Billionaire investor John Paulson hasn’t moved, either, but is, if anything, even more bullish about what he has called “the Singapore of the Caribbean.” While he declined to be interviewed for this story, island officials say Paulson’s investment will reach $1.5 billion by year’s end, a figure his aides don’t dispute.
So far Paulson has acquired three beachfront hotels, including the luxe five-diamond St. Regis Bahia Beach Resort and the historic Condado Vanderbilt, which was designed by the same architects as New York’s Biltmore Hotel but lay dormant for 15 years until he came along. It reopened in December after a $200 million renovation.
Paulson has also snapped up office space and a parking lot in the financial district, and empty lots on the boutique-lined Ashford Avenue, primed for new high-rise condos.
Nicholas Prouty, who runs Putnam Bridge, a private equity firm that targets distressed assets, did call the moving vans. Putnam picked up two big Puerto Rico projects from bankruptcy court. Then, despite “some sense of guilt” about uprooting his 10-year-old daughter, Prouty moved Putnam Bridge and his family from Greenwich, Conn. to San Juan in 2013.
Putnam is sinking at least $100 million into revitalizing the Puerto del Rey Marina near the town of Fajardo and poured more than $200 million into Ciudadela, a mixed-use development in San Juan’s Santurce district that has now sold all of its 312 condo units, primarily to Puerto Ricans. “Beachfront property located in a country with an American flag in the courtroom and a CVS on the corner is a good bet,” Prouty opines, adding that the current government’s policies are setting the stage for an island comeback.
While he moved for business and tax reasons, Prouty says his weekends are now “utterly epic,” with his family cruising to “pristine beaches with funky beach bars” where they meet up with others from his daughter’s private school.
What about the danger that either Puerto Rican voters or the U.S. Congress will decide the deals being handed out to the rich are so good they shouldn’t be true?
Those already approved for Act 20 and 22 benefits have some protection from shifting island sentiment: contracts with the Puerto Rican government guaranteeing favorable tax treatment for 20 years. Meanwhile, government officials optimistically predict that, by 2017, Act 20 and 22 will together create 82,500 jobs, more than ten times what they’ve generated so far.
As for a change in the U.S. tax code, that seems unlikely for now, particularly if Republicans deem it a tax hike. And Washington presumably wants Puerto Rico to succeed. After all, if the territory can’t pay its $71 billion in government debts, U.S. investors will take part of the hit.
Still, it’s worth remembering this: Some of Puerto Rico’s economic problems can be traced to Congress’ decision to end, as of 2006, a special tax break for drug and other manufacturers who produced in Puerto Rico and exported to the U.S.
Thursday, February 12, 2015
Text of H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015 | Res. Comm. Pedro Pierluisi
View the text of H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015 here: Puerto Rico Chapter 9 Uniformity Act of 2015
Text of H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015 | Res. Comm. Pedro Pierluisi
Text of H.R. 870, the Puerto Rico Chapter 9 Uniformity Act of 2015 | Res. Comm. Pedro Pierluisi
Tuesday, February 10, 2015
Puerto Rico Bondholders Shoot Down Restructuring Law
Law360, New York (February 08, 2015, 12:51 PM ET) -- A federal judge struck down a Puerto Rico law that threatened investors in public corporations with harsh restructuring terms, a victory for investment funds battling to protect billions of dollars in debt claims against the commonwealth’s beleaguered electric utility.
In a sweeping decision voiding the commonwealth’s so-called Recovery Act, U.S. District Judge Francisco A. Besosa found that the local debt restructuring system for certain Puerto Rico public corporations contravened federal bankruptcy law and was therefore unconstitutional. Bondholders feared the Recovery Act, enacted hurriedly in June under.
By Andrew Scurria
Puerto Rico Bondholders Shoot Down Restructuring Law
In a sweeping decision voiding the commonwealth’s so-called Recovery Act, U.S. District Judge Francisco A. Besosa found that the local debt restructuring system for certain Puerto Rico public corporations contravened federal bankruptcy law and was therefore unconstitutional. Bondholders feared the Recovery Act, enacted hurriedly in June under.
By Andrew Scurria
Puerto Rico Bondholders Shoot Down Restructuring Law
Monday, February 09, 2015
En un año se fueron 74,000 personas de Puerto Rico
Puerto Rico perdió el 2.1 % de su población en el último ejercicio fiscal, según datos difundidos hoy, que muestran que el emigrante puertorriqueño es cada vez más joven, más pobre y con menos oportunidades laborales.
El Instituto de Estadísticas de Puerto Rico difundió hoy un informe sobre el perfil del migrante en la isla, que en su mayor parte se remite a datos de 2013 y que detalla que en ese año unas 74,000 personas emigraron de la isla, mientras que unas 25,000 vinieron a vivir a ella.
Ello quiere decir que en total la isla perdió ese año unas 49,000 personas, una cifra que en el año fiscal 2014 (que abarca de julio de 2013 a junio de 2014, los datos más recientes) ascendió a 74.000 personas.
Así, en el último ejercicio fiscal, la isla perdió un 2.1 % de sus 3.7 millones de habitantes, de acuerdo con los datos de este organismo.
Hay que tener en cuenta que Puerto Rico tiene una superficie muy similar a la mediterránea isla de Córcega, y, sin embargo, sus poblaciones son de 3.7 millones de personas frente a 320,000 habitantes, respectivamente.
La inmensa mayoría de los emigrantes puertorriqueños se traslada a Estados Unidos, ya que al ser Puerto Rico un Estado Libre Asociado de ese país sus habitantes tienen la ciudadanía estadounidense y no requieren de permisos especiales para trasladarse allí.
En 2013, más de la mitad lo hizo al sur de Estados Unidos, lo que supone un cambio de tendencia con respecto a hace años, cuando era mayoritaria la emigración al norte, sobre todo a Nueva York y alrededores.
Los estados que más puertorriqueños atrajeron en 2013 fueron, por este orden, Florida, Pensilvania, Georgia, Ohio, California, Texas, Nueva Jersey y Nueva York.
El Instituto detectó que el emigrante puertorriqueño del año pasado tenía una media de 28.5 años, la menor edad de los últimos seis años, y el 52 % no formaba parte de la fuerza laboral (ni trabajaba ni buscaba trabajo), frente al 45 % de un año antes. Además, sus ingresos eran un 14 % inferiores a los de los emigrantes de 2012.
En cualquier caso, 19,000 emigrantes tenían algún tipo de educación terciaria, o superior, incluidos doctorados y maestrías; mientras que de quienes vinieron a vivir a la isla, sólo 7,000 personas tenían ese perfil.
"No sabemos si eso constituye un 'brain drain' (fuga de cerebros), pero no podemos ser ingenuos en pensar que la emigración neta de 12,000 personas con alto perfil educativo durante un sólo año no tiene efecto en nuestra sociedad", dijo hoy en un comunicado el director ejecutivo del Instituto, Mario Marazzi Santiago.
En cuanto al perfil de las personas que se mudaron a Puerto Rico, se observa que envejeció por tercer año consecutivo, al pasar de una media de edad de 32.8 en 2012 a 34.4 en 2013, con lo que se supera también por tercer año consecutivo la edad media de los emigrantes.
Otra diferencia que se observa entre emigrantes e inmigrantes es que cada vez llegan más hombres a vivir a Puerto Rico (del 48 % en 2012 al 57 % en 2013), mientras que cada vez se van más mujeres, una tendencia que se observa desde 2011.
El 13 % de quienes se fueron de Puerto Rico no eran ni puertorriqueños ni estadounidenses, un porcentaje que tan sólo un año antes fue del 10 %. Además, el 80 % se fue sin haber obtenido aún la ciudadanía.
También más del 80 % del total de los hombre que emigran alega hacerlo por motivos laborales, mientras que algo menos del 70 % de las mujeres ofrece esa explicación y el resto de ellas explica que se traslada para vivir retiradas o para atender a algún familiar.
El 52 % de los puertorriqueños que se fueron de la Isla no formaba parte de la fuerza laboral, o sea que ni trabajaba ni buscaba trabajo.Por Agencia EFE
En un año se fueron 74,000 personas de Puerto Rico
Puerto Rico Bondholders Shoot Down Restructuring Law
Law360, New York (February 08, 2015, 12:51 PM ET) -- A federal judge struck down a Puerto Rico law that threatened investors in public corporations with harsh restructuring terms, a victory for investment funds battling to protect billions of dollars in debt claims against the commonwealth’s beleaguered electric utility.
In a sweeping decision voiding the commonwealth’s so-called Recovery Act, U.S. District Judge Francisco A. Besosa found that the local debt restructuring system for certain Puerto Rico public corporations contravened federal bankruptcy law and was therefore unconstitutional. Bondholders feared the Recovery Act, enacted hurriedly in June under.
By Andrew Scurria
Puerto Rico Bondholders Shoot Down Restructuring Law - Law360
In a sweeping decision voiding the commonwealth’s so-called Recovery Act, U.S. District Judge Francisco A. Besosa found that the local debt restructuring system for certain Puerto Rico public corporations contravened federal bankruptcy law and was therefore unconstitutional. Bondholders feared the Recovery Act, enacted hurriedly in June under.
By Andrew Scurria
Puerto Rico Bondholders Shoot Down Restructuring Law - Law360
As middle class flees, Puerto Rico tries luring rich people - Thomasville Times-Enterprise: News
PALMAS DEL MAR, Puerto Rico (AP) — Bond trader Ben Eiler swapped life in suburban Georgia for an island in the Caribbean, and he didn't even have to apply for a visa.
The towering 38-year-old native of Arkansas is one of at least 250 people who've accepted Puerto Rico's invitation to well-heeled U.S. citizens to move to the island and enjoy life without taxes on capital gains, an enticing offer for those whose income is derived from investments.
Eiler lives in a gated community on Puerto Rico's southeastern shore, making a commute of less than 5 minutes from house to office across manicured greens, with an expansive ocean view.
"Driving to work in your flip-flops and golf cart is not bad," he says with a quick laugh.
This semi-autonomous U.S. territory sets its own tax policy, and its residents pay no federal tax on income derived locally. Mired in a recession for almost a decade and with an unemployment rate stuck above 13 percent, more than double the U.S. rate overall, it decided in 2012 to try to lure wealthy investors who would be likely to buy expensive real estate, establish businesses and create jobs.
Act 22, the legislation that set up the program, exempts people from taxes on any capital gains accrued after they move and it provides an exemption from local taxes on dividends and interests if they take up permanent residence, among other conditions. A government brochure sums it up as "Sun, Sand and Zero Taxes."
"Frankly, for Americans, it's sort of an unprecedented thing," said Alex Daley, a technology investment strategist who moved from Vermont with his wife in December 2013.
Daley said he felt the U.S. mainland had become a more hostile tax environment under President Barack Obama. "They try to hold the people with the most mobility and the most wealth captive," Daley said of the U.S. government. "People are getting angry about that."
The law is sparking some controversy in Puerto Rico, however, particularly among economically beleaguered middle-class workers who pay island taxes on non-investment income. Others say the strategy helps erode the U.S. federal government's tax base by diverting revenue from the mainland.
The towering 38-year-old native of Arkansas is one of at least 250 people who've accepted Puerto Rico's invitation to well-heeled U.S. citizens to move to the island and enjoy life without taxes on capital gains, an enticing offer for those whose income is derived from investments.
Eiler lives in a gated community on Puerto Rico's southeastern shore, making a commute of less than 5 minutes from house to office across manicured greens, with an expansive ocean view.
"Driving to work in your flip-flops and golf cart is not bad," he says with a quick laugh.
This semi-autonomous U.S. territory sets its own tax policy, and its residents pay no federal tax on income derived locally. Mired in a recession for almost a decade and with an unemployment rate stuck above 13 percent, more than double the U.S. rate overall, it decided in 2012 to try to lure wealthy investors who would be likely to buy expensive real estate, establish businesses and create jobs.
Act 22, the legislation that set up the program, exempts people from taxes on any capital gains accrued after they move and it provides an exemption from local taxes on dividends and interests if they take up permanent residence, among other conditions. A government brochure sums it up as "Sun, Sand and Zero Taxes."
"Frankly, for Americans, it's sort of an unprecedented thing," said Alex Daley, a technology investment strategist who moved from Vermont with his wife in December 2013.
Daley said he felt the U.S. mainland had become a more hostile tax environment under President Barack Obama. "They try to hold the people with the most mobility and the most wealth captive," Daley said of the U.S. government. "People are getting angry about that."
The law is sparking some controversy in Puerto Rico, however, particularly among economically beleaguered middle-class workers who pay island taxes on non-investment income. Others say the strategy helps erode the U.S. federal government's tax base by diverting revenue from the mainland.
Friday, February 06, 2015
Five-Minute Floor Speech on the Introduction of the Puerto Rico Statehood Admission Process Act | Res. Comm. Pedro Pierluisi
Text of the Puerto Rico Statehood Admission Process Act | Res. Comm. Pedro Pierluisi
View the text of the Puerto Rico Statehood Admission Process Act here: Puerto Rico Statehood Admission Process Act
Text of the Puerto Rico Statehood Admission Process Act | Res. Comm. Pedro Pierluisi
Text of the Puerto Rico Statehood Admission Process Act | Res. Comm. Pedro Pierluisi
Thursday, February 05, 2015
Puerto Rico Launches Campaign for Independence | News | teleSUR
The Puerto Rican Independence Party (PIP) has launched an international campaign to promote the country's independence from the United States, kicking off the process of decolonization.
Secretary-General of the PIP, Juan Dalmau, said the decision was taken after PIP President Ruben Berrios was given the floor to speak at a recent summit of the Community of Latin American and Caribbean States (CELAC) in Costa Rica. When given the floor, Berrios took the opportunity to push for a Puerto Rican independence movement, which the bloc largely supported.
“This is a new international campaign to pressure the United States to respond to the claim of decolonization of Puerto Rican people,” Dalmau said during a press conference Monday. “What recently happened in CELAC marks the beginning of the end of colonialism in Puerto Rico.”
Though Puerto Rico is not part of CELAC, Nicaraguan President Daniel Ortega offered his speaking time to the independence leader. Berrios was designated a special adviser on international affairs to the government of Nicaragua, a partnership that is seen as important for the country's independence movement.
Puerto Rico has a long history of colonialism, first being under Spain’s contro,l and then the United States since 1898. A wide variety of groups,social movements and political parties have unsuccessfully fought for independence over the years.
Latin American and Caribbean leaders gave their support to the Puerto Rican Independence Party at a recent summit in Costa Rica.
Puerto Rico Launches Campaign for Independence
Secretary-General of the PIP, Juan Dalmau, said the decision was taken after PIP President Ruben Berrios was given the floor to speak at a recent summit of the Community of Latin American and Caribbean States (CELAC) in Costa Rica. When given the floor, Berrios took the opportunity to push for a Puerto Rican independence movement, which the bloc largely supported.
“This is a new international campaign to pressure the United States to respond to the claim of decolonization of Puerto Rican people,” Dalmau said during a press conference Monday. “What recently happened in CELAC marks the beginning of the end of colonialism in Puerto Rico.”
Though Puerto Rico is not part of CELAC, Nicaraguan President Daniel Ortega offered his speaking time to the independence leader. Berrios was designated a special adviser on international affairs to the government of Nicaragua, a partnership that is seen as important for the country's independence movement.
Puerto Rico has a long history of colonialism, first being under Spain’s contro,l and then the United States since 1898. A wide variety of groups,social movements and political parties have unsuccessfully fought for independence over the years.
Latin American and Caribbean leaders gave their support to the Puerto Rican Independence Party at a recent summit in Costa Rica.
Puerto Rico Launches Campaign for Independence
Report: Puerto Rico is bankrupt, with actual debt that's twice the official figure
In an unusual step, Puerto Rico's leading media group openly declared on Tuesday, calling for the restructuring of a public debt that it says is really twice the official figure.
"Puerto Rico is broke" is the eloquent front-page headline Tuesday of El Nuevo Dia, the daily with the most readers in the U.S. commonwealth and which dedicates a 20-page special to proving that the Caribbean island's accumulated debt is double the generally accepted figure of $73 billion.
The article talks about a $167.46 billion debt, a "frightening" figure obtained by adding up interest on the debt and the deficit accumulated by retirement and public health programs.
"You don't need to be an economist from Harvard to understand that this debt is unsustainable," says the editorial entitled "Restructuring, there's no other choice," and which bluntly states that "Puerto Rico's viability as a country is at stake."
This move by the Ferre Rangel Group was being described Tuesday as historic, because up to now few have dared to voice such a warning, and yet the alarm is being sounded by a conglomerate that besides controlling three of the five biggest newspapers on the island, has many other enterprises.
"Since the beginning of the century at least 20 sovereign nations have defaulted or renegotiated their government debts. Some preventively and others after defaulting," the editorial says.
The editor of the daily, Luis Alberto Ferre Rangel, says the intention is to "focus public debate" on "recapitalizing" the Government Development Bank, restructuring the debt, redimensioning government and carrying out a genuine tax reform."
Without singling out either of the two parties that dominate Puerto Rican politics, it sums up very clearly the causes that have led to this complicated economic situation, with simple infographics that go back to the 1980s.
At that time, it says, "the government began to borrow funds in order to pay its debts when faced with a reduction of tax revenues caused, among other factors, by the economic crisis set off by the oil embargo of the mid-1970s and the recession from the mid-1980s to the beginning of the 1990s."
"Over the past 15 years, the government has operated under a constant deficit. Poor administration and wrong decisions paved the way to a historic public debt that now has the country almost totally bankrupt," the paper says.
For that reason, "it is now an urgent matter to explore and establish the government's options for getting the country out of this profound crisis," which is only getting worse, the daily said, because of the exodus of Puerto Ricans to the U.S. mainland.
Fewer than 1 million of Puerto Rico's 3.5 million residents have steady jobs, food costs have gone up almost 50 percent over the last 10 years, pension systems have accumulated $34 billion in unfunded liabilities and the total owed to bondholders comes to $47,800 per inhabitant.
Report: Puerto Rico is bankrupt, with actual debt that's twice the official figure
"Puerto Rico is broke" is the eloquent front-page headline Tuesday of El Nuevo Dia, the daily with the most readers in the U.S. commonwealth and which dedicates a 20-page special to proving that the Caribbean island's accumulated debt is double the generally accepted figure of $73 billion.
The article talks about a $167.46 billion debt, a "frightening" figure obtained by adding up interest on the debt and the deficit accumulated by retirement and public health programs.
"You don't need to be an economist from Harvard to understand that this debt is unsustainable," says the editorial entitled "Restructuring, there's no other choice," and which bluntly states that "Puerto Rico's viability as a country is at stake."
This move by the Ferre Rangel Group was being described Tuesday as historic, because up to now few have dared to voice such a warning, and yet the alarm is being sounded by a conglomerate that besides controlling three of the five biggest newspapers on the island, has many other enterprises.
"Since the beginning of the century at least 20 sovereign nations have defaulted or renegotiated their government debts. Some preventively and others after defaulting," the editorial says.
The editor of the daily, Luis Alberto Ferre Rangel, says the intention is to "focus public debate" on "recapitalizing" the Government Development Bank, restructuring the debt, redimensioning government and carrying out a genuine tax reform."
Without singling out either of the two parties that dominate Puerto Rican politics, it sums up very clearly the causes that have led to this complicated economic situation, with simple infographics that go back to the 1980s.
At that time, it says, "the government began to borrow funds in order to pay its debts when faced with a reduction of tax revenues caused, among other factors, by the economic crisis set off by the oil embargo of the mid-1970s and the recession from the mid-1980s to the beginning of the 1990s."
"Over the past 15 years, the government has operated under a constant deficit. Poor administration and wrong decisions paved the way to a historic public debt that now has the country almost totally bankrupt," the paper says.
For that reason, "it is now an urgent matter to explore and establish the government's options for getting the country out of this profound crisis," which is only getting worse, the daily said, because of the exodus of Puerto Ricans to the U.S. mainland.
Fewer than 1 million of Puerto Rico's 3.5 million residents have steady jobs, food costs have gone up almost 50 percent over the last 10 years, pension systems have accumulated $34 billion in unfunded liabilities and the total owed to bondholders comes to $47,800 per inhabitant.
Report: Puerto Rico is bankrupt, with actual debt that's twice the official figure
Tuesday, February 03, 2015
Google Fiber-less and sick of slow Internet? Move to Mongolia
Getty Images The Internet service has download speeds of up to 1 gigabit per second—that’s roughly 100 times faster than the national average.
And the cost? It’s currently $70 a month in the cities where it already exists: Provo, Utah, the Kansas City metro area and Austin, Texas.
Google Don’t want to move to Provo, Utah, or Kansas City for faster Internet? If the only thing you value is speedy Internet, move to Moldova, Mongolia, Serbia or Lithuania. All those countries have faster average Internet speeds than the U.S. In fact, 34 countries rank higher than the U.S. for Internet bandwidth per Internet user, according to data from the World Economic Forum.
Here’s its list of the 35 countries and their international Internet bandwidth in kb/s per Internet user, as of 2012.
| Country/Economy | Value |
| 1. Luxembourg | 4,091.4 |
| 2. Hong Kong SAR | 1,239.8 |
| 3. Malta | 638.5 |
| 4. Singapore | 391.1 |
| 5. Iceland | 371.2 |
| 6. Switzerland | 322.7 |
| 7. Sweden | 279.8 |
| 8. Portugal | 193.8 |
| 9. Norway | 189.1 |
| 10. United Kingdom | 188.9 |
| 11. Belgium | 184.9 |
| 12. Denmark | 175 |
| 13. Netherlands | 172.9 |
| 14. Finland | 159.5 |
| 15. Puerto Rico | 135.4 |
| 16. Romania | 116 |
| 17. Austria | 108.5 |
| 18. Canada | 101 |
| 19. Czech Republic | 101 |
| 20. Ireland | 97 |
| 21. Slovenia | 95.9 |
| 22. Bulgaria | 94.4 |
| 23. Moldova | 94 |
| 24. Mongolia | 91.9 |
| 25. France | 84.6 |
| 26. Spain | 81.3 |
| 27. Italy | 76.2 |
| 28. Germany | 75.5 |
| 29. Serbia | 70.5 |
| 30. Poland | 70.4 |
| 31. Lithuania | 70.1 |
| 32. Cyprus | 69.7 |
| 33. Barbados | 69.5 |
| 34. Australia | 69.5 |
| 35. United States | 62.3 |
By SallyFrench
Google Fiber-less and sick of slow Internet? Move to Mongolia
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