Puerto Rico's Exit From Bankruptcy At Risk, Threatening Economic And Political Stability

• Disagreements about pension cuts between the Puerto Rican legislature and the federal board overseeing its finances have increased the risk that a deal with bondholders to end Puerto Rico’s bankruptcy will not move forward. 
• Fitch Solutions believes this scenario would be negative for Puerto Rico’s political and economic stability, as it could lead creditors to demand immediate repayment of their bonds while increasing the risk of public spending cuts, potentially driving social instability. 
• Even if a deal is made to support debt restructuring in the near term, the agency sees a risk that public pensions will see cuts in the long term, which would likely spark public protests.

(Source: Fitch Solutions)