April 13 (Reuters) - The government of Puerto Rico and the hedge funds that own its bonds are seeking help from former International Monetary Fund officials to resolve the country’s growing debt crisis, the Wall Street Journal reported.
Puerto Rico has retained the IMF's former first deputy managing director, Anne Krueger, as a consultant and a committee representing the hedge funds is in talks with Claudio Loser, the former director of the organization's Western Hemisphere department, the newspaper said, citing sources familiar with the matter. (on.wsj.com/1I5K7fL)
Puerto Rico is struggling with more than $70 billion in total debt and must overcome opposition from local lawmakers as well as demands from investors for extra security as it attempts to sell more debt.
The hedge funds that own much of Puerto Rico’s government bonds are looking for ways from the IMF playbook to use the promise of new loans to convince governments about financial overhaul, the newspaper said, citing sources familiar with the matter.
Spokespersons for the Puerto Rico government were not immediately available for comment.
Fitch Ratings last month downgraded Puerto Rico’s general obligation and related debt two notches deeper into junk to ‘B’, citing concerns about the island’s ability to execute a planned financing and the legislature’s willingness to pay. (Reporting by Zara Mascarenhas in Bengaluru; Editing by Anupama Dwivedi)