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UPDATE 1-White House: No plans to bail out Puerto Rico
October 15, 2015 / 7:43 PM / 2 years ago

UPDATE 1-White House: No plans to bail out Puerto Rico

(Updates with Earnest quotes, background)

WASHINGTON, Oct 15 (Reuters) - The White House on Thursday said it had no plans to provide a financial bailout to Puerto Rico but was trying to help it find a way out of its economic troubles.

White House spokesman Josh Earnest denied a media report that the U.S. Treasury Department is in discussions with Puerto Rican officials to provide a bailout package to the debt-laden U.S. territory.

“It is inaccurate to suggest that the Treasury Department is in talks to undertake any of Puerto Rico’s obligations,” Earnest told reporters at a daily briefing.

The Wall Street Journal reported on Wednesday that U.S. officials were discussing the issue of a “superbond” to help restructure the commonwealth’s debt, which would be administered by Treasury and issued to existing bondholders in exchange for outstanding debt at a negotiated ratio.

“To my layman view, issuing bonds that are backed by the full faith and credit of the United States, would raise some questions about whether or not we’re undertaking their financial obligations,” Earnest continued.

Puerto Rico, in recession for nearly a decade, is trying to restructure its debt, which amounts to $72 billion. The U.S. territory defaulted on debt in August.

Earnest said the U.S. government was working to help Puerto Rico find ways to overcome its financial problems.

“There is not just a willingness but actually a desire to try to work effectively with Puerto Rican officials to use the expertise of the officials in the federal government to offer them advice about creating a path back to a sustainable economic picture on the island,” Earnest said. (Reporting by Jeff Mason, Doina Chiacu and Lisa Lambert; Editing by David Alexander)

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