The Trump administration appears to have made a break-through in negotiating terms for a $4.7 billion Community Disaster Loan to rebuild Puerto Rico after Hurricane Maria.
U.S. Treasury Secretary Steven Mnuchin said he will be hand-delivering documents to the Commonwealth of Puerto Rico on March 22 to wrap up negotiations on a multi-billion-dollar loan that has been by delayed for six months on transparency demands, after a court-ordered audit found 644 undisclosed accounts with about $7 billion in undisclosed cash.
Hurricane Maria slammed into Puerto Rico near the town of Yabucoa at 6 a.m. ET on September 21 with 155-mile-per-hour winds. Given Puerto Rico’s modest geographic size, the devastation of basic water and electric power infrastructure has been epic.
Maria’s $102 billion worth of destruction ranked it as the second most expensive hurricane in U.S. history. Only the $161 billion from Hurricane Katrina was worse. Insurance analysts AIR Worldwide estimated that Puerto Rico’s losses from the category five storm at $72 billion, with only about half covered by insurance.
Breitbart News reported in 2016 that Puerto Rico filed the largest public sector bankruptcy in U.S. history, after vulture capitalist hedge funds bought big pieces of the island’s $73 billion in defaulted debt for pennies-on the-dollar, then refused to negotiate new repayment terms. The territory also owes $40 billion in unfunded pension obligations.
The hedge funds expected to make huge profits by taking over the islands’ utility assets, but Maria’s damage was so extensive that clean water, electrical power, and cell phone service was almost completely disrupted. As of March 7, over 156,000 island residents are still without power, according to the U.S. Department of Energy.
The Puerto Rican economy expects to decline by another 11 percent this year, and about 20 percent of the territory’s 4 million population have left in the last decade. The forclosure.com website reveals 629 recent real estate foreclosures, and only 46 short-sales, on the island.
Executive Director of Jubilee USA Eric LeCompte told Breitbart News that the Trump administration’s settling of the transparency issues, clearing the way for Federal Emergency Management Agency to distribute a Community Disaster Loan, is very good news for Puerto Rico.
LeCompte is associated with faith-based communities that believe Puerto Rico has been impoverished by a combination of irresponsible government spending, a massive natural disaster, and the actions of hedge funds.
He believes that there is now momentum to move forward on a global bankruptcy settlement that will probably include a five-year moratorium on debt payments. But he warns that if the hedge funds are obstructionist, the bankruptcy judge could approve a “haircut” that could wipe out a big percentage of the debt that Wall Street bought up on the cheap.