The oversight board in charge of Puerto Rico's ongoing debt restructuring saga announced on Sunday that they have come to terms with bondholders of around $35 billion, which accounts for almost 50 per cent of the bankrupt island's total bonded debt.
The agreement, which is on the framework for the plan of adjustment, provides for more than a 60 per cent average haircut for all $35 billion, a 36 per cent haircut on pre-2012 general obligation or "GO" bonds, and a 27 per cent haircut on public authority bonds that carry a constitutional guarantee on payment.
The board says the deal with supporting creditors will reduce the amount of Commonwealth-related bonds outstanding to less than $12 billion.
It will also slash the bankrupt island's debt service, including principal and interest over the next 30 years, by roughly half to $21 billion from $43 billion.
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