Puerto Rico officials meet with credit rating agencies
By The Star Staff
Fiscal Agency and Financial Advisory Authority Executive Director Omar Marrero Díaz led a delegation of officials from the Puerto Rico government’s fiscal team to New York City to hold meetings with the credit rating agencies Standard & Poor’s (S&P) and Moody’s, it was announced Monday.
Joining Marrero Díaz in the delegation Treasury Secretary Francisco Parés Alicea; Labor and Human Resources Secretary Gabriel Maldonado González; Office of Management and Budget (OMB) Executive Director Juan Carlos Blanco Urrutia; Public-Private Partnerships Authority (P3A) Executive Director Fermín Fontanés Gómez; and Office for Recovery, Reconstruction and Resilience Executive Director Manuel Laboy Rivera.
One of the conditions for the Financial Oversight and Management Board to be dissolved is for Puerto Rico to be able to return to the markets with good credit ratings.
“During meetings with credit rating agencies, we provided a detailed update on efforts to restructure what remains of the government debt, promote economic development and discipline in financial management, and eventually regain access to capital markets,” Marrero Díaz said. “In addition, an update was provided on the sustained economic growth that Puerto Rico has had over the past two years and 10 months.”
This is the third session of meetings that the government’s fiscal team has held with the accreditation houses. On Feb. 14-16, similar presentations were made to representatives of S&P, Moody’s and Fitch Ratings in Miami. Additionally, during the PRNOW investment event held last May in New York City, Marrero Díaz met again with representatives from S&P and Moody’s.
So far this year and in collaboration with the oversight board, significant steps have been taken to restructure what remains of the debt, including a third debt adjustment plan for the Puerto Rico Electric Power Authority that would restructure about $9 billion and is still being elucidated in federal court. In addition, the work of private companies contracted to operate, improve and maintain electricity distribution and transmission assets in the case of LUMA Energy, and more recently the generation assets under Genera PR, continues, the fiscal team said.
Likewise, recovery efforts from the fiscal crisis have generated positive comments from Fitch Ratings, as well as the federal Government Accountability Office, with reports highlighting the reduction in total debt by almost 60% and progress in the publication of financial reports of the Puerto Rico government, among other achievements, the officials said.
Fontanés Gómez of the P3A said the island government is seeking to promote its economic development by securing private capital for public projects through the public-private alliance model to execute large-scale transformation projects, as well as contribute to restructuring and fiscal stability of the island.
“This has not only strengthened Puerto Rico’s position and credibility in the markets, but has also confirmed that we are a ripe destination for investment opportunities,” Fontanés Gómez added. “It is important that Puerto Rico continues to promote the investment appetite that is already on the table. Eyes are on the island.”
Meanwhile, Parés Alicea presented to the representatives of the accrediting houses the results of the Treasury Department’s efforts to increase collections and improve financial transparency by integrating more technology.
“Income continues to be greater than expenditures and we anticipate that the government’s finances will continue to be stable,” he said. “We present the results of work that ensures a healthy cash flow to meet all our obligations. In addition, we are on our way to issuing the financial statements for the year 2022. The prudence, discipline and control that we have practiced as a government, without a doubt, is yielding good results.”
Blanco Urrutia, meanwhile, provided an update on the OMB’s efforts to improve government operations and fiscal responsibility.
“The OMB is responsible for maximizing the utilization and performance of all the resources we have available, including federal funds,” he said. “Examples such as the Public Service Reform and the IDEAR project in the Department of Education reflect how we are responsibly prioritizing areas of great importance using existing tools.”