In upcoming years, the term “debt forgiveness” will become a common phrase among individuals, proprietorships, and businesses in Puerto Rico, but not for a good reason.
Before Hurricane María, if Puerto Rico were to pay off its debt without completely choking off economic and social development, it needed a total cancellation of the interest on the public debt and a reduction in the principal of approximately 45 percent to 90 percent. Now, in the wake of the storm, the debt relief needed is much greater.
The Commonwealth of Puerto Rico's second delay in submitting its revised fiscal plan to the Financial Oversight and Management Board for Puerto Rico "underscores the growing economic uncertainties it faces as it continues to recover from Hurricane María," Moody's Investors Service noted in a new report.
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