The Commonwealth of Puerto Rico continues its efforts to
maintain fiscal and financial stability. This week, we expect the
Commonwealth to move forward with an approximately US$3 billion
General Obligation bond financing. This offering is expected to
provide the Commonwealth with sufficient liquidity to enable the
Commonwealth to analyze its options in a more methodical fashion.
The Commonwealth agreed to waive sovereign immunity with respect to
state and federal courts in Manhattan and the Federal District
Court in Puerto Rico (as well as Commonwealth courts). However, the
Commonwealth did not waive sovereign immunity with respect to
assets located in Puerto Rico. Moreover, as general obligation
debt, lenders cannot accelerate on a default despite request from
investors for a provision permitting that remedy. Statement.
