Former NY Governor on the State of Puerto Rico

By Ad Hoc Group of Puerto Rico General Obligation Bondholders, Special for  USDR

Today the Ad Hoc Group of Puerto Rico General Obligation Bondholders and its advisor, former Governor of New York, George Pataki, released a Memorandum for Policymakers on Puerto Rico. The memorandum, along with a presentation which can be found at, includes analysis of financial material that was recently made public by the Center for Investigative  Journalism.

Key excerpts from the  memo:

  • The (Commonwealth’s FY 2018) budget includes year over year public expenditure increases of $575 million; a fact which the Commonwealth attempts to obscure by reclassifying certain expenses as “below the line,” including two large slush funds (the $545 million “reconciliation adjustment,” and the $305 million “budgetary reserve”).

  • The Board insists on projecting a decrease in the Commonwealth’s revenues and a contraction in the island’s GNP, in spite of contradictory information. Puerto Rico’s revenues are up, powered by robust consumer consumption.  Both tax collections and nominal GNP are at all-time highs.

  • The Oversight Board uses these misleading projections to argue that the island has the capacity for only $400 million in debt service in the coming year. In fact, before pension payments, the Commonwealth is running a primary surplus of $3 billion for FY18.  It also has $1 billion less in accounts payable – spread over multiple years – than had previously been forecast by the Fiscal Plan. 

The memorandum for policymakers along with a more detailed presentation entitled “Puerto Rico: Separating Fact from Fiction” can both be found online at

SOURCE Ad Hoc Group of Puerto Rico General Obligation  Bondholders

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