Puerto Rico’s Debt Crisis

Re “A Lifeline for Puerto Rico” (editorial, March 13):

As stakeholders work toward a solution to Puerto Rico’s debt crisis, it is critical that we adhere to the principle that any restructuring should require the approval of a majority of creditors and should respect the rights and concerns of all creditor classes.

In contrast, any House bill that does not permit fair negotiations and instead includes the “cram down” provisions favored by the Obama administration that would force nonconsensual debt restructurings on creditors will fail to preserve Puerto Rico’s access to the capital markets, which is critical for the commonwealth’s economic future and its ability to meet citizens’ needs. It would also fail to address the fundamental operational and fiscal problems that have hamstrung Puerto Rico’s economy.

With the right structure in place, fair deals can be reached between the commonwealth and its creditors. A case in point is the restructuring agreement reached between the Puerto Rico Electric Power Authority and its creditors that I helped negotiate. This nearly $8 billion deal provides a good precedent. It was approved last month by the Puerto Rican legislature and is progressing well.

Any legislation must include the ability to reach and preserve consensual deals like this and allow all stakeholders to work toward a successful resolution of Puerto Rico’s debt issues.

STEPHEN SPENCER

Minneapolis

The writer is a financial adviser to major creditors of Puerto Rico.

Puerto Rico’s Debt Crisis - The New York Times