Sept 24 (Reuters) - A Puerto Rico working group, composed of local and senior officials, announced on Thursday that it would seek a consensual negotiation that would ultimately result in a single, comprehensive exchange transaction.
The group met with Governor Alejandro Garcia Padilla and members of the Puerto Rico legislature to discuss its ongoing efforts to support fiscal stability and economic growth in Puerto Rico. It said it wanted to avoid a piecemeal strategy that could result in uncoordinated and inconsistent agreements with creditors.
The working group whose official name is the Working Group for the Fiscal and Economic Recovery of Puerto Rico includes the Governor's chief of staff, Victor Suarez, and the head of the Government Development Bank, Melba Acosta. Puerto Rico has $47 billion of debt excluding public agencies like power utility PREPA and water authority PRASA.
Governor Padilla shocked investors in June when he said the island's debt, totaling $72 billion, was unpayable and required restructuring.
The report released Thursday evening by the governor's office outlines the working group's restructuring process and principles. It argues that a piecemeal plan would more likely result in litigation among creditors and a lower chance of success.
Instead, the plan would engage with creditors and structure a voluntary exchange offer, in which the Commonwealth would seek an agreement with creditors to amend certain payment terms.
Among the group's restructuring principles is to avoid a default on the Commonwealth's debt, to ensure that the Commonwealth can continue to make payments, and to create a long-term financing solution to tackle the island's indebtedness, according to the statement.
Puerto Rico's financing arm, the Government Development Bank (GDB), will be the second entity from the commonwealth to engage in debt restructuring negotiations, following utility PREPA, the head of the GDB said on Thursday.
(Reporting by Robin Respaut; Editing by Bernard Orr)