Caribbean Business, edition December 17th, 2015

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THURSDAY, DECEMBER 17, 2015 | VOL. 1 EDITION 7

| WEEKLY $2.00 | © 2015 LATIN MEDIA HOUSE, LLC | CARIBBEANBUSINESS.PR

Prepa Faces Another RSA Deadline

Is Another Mariel Brewing in Cuba?

UBS Puerto Rico Downsizes Again

Electric Company Deal Vital for Debt Restructuring

Thaw Sparks Mass Exodus

Several Divisions Targeted for Layoffs

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COVER STORY

TThe Supremes Take up P.R. Bankruptcy Top Court to Examine Recovery Act PAGE

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TOP STORY

García Padilla Bows Out PDP Candidates Jockey for Position

Person of the Year: The Debt Monster

With recent surveys showing very low approval ratings and after several months of speculation, Gov. Alejandro García Padilla announced Monday he wouldn’t run for re-election in 2016 to concentrate all his energy and efforts on working to develop the necessary solutions to resolve Puerto Rico’s ongoing fiscal crisis. “Even though I want to with all my heart, I won’t seek my re-election to the governor’s office,” said García Padilla in a

to Puerto Rico’s future. “These times require a greater loyalty to the future than to the present…. These times require having greater loyalty to the people than to the person,” said García Padilla, who at times seemed to be choked up with emotion. His announcement comes at a crucial time for Puerto Rico as the commonwealth is struggling with a $70 billion debt load, a nearly 10-year economic depression and massive out-

prerecorded message Monday afternoon, as first reported by CB Online Saturday. Arguing there is an inherent conflict between the time demanded by “the tough decisions that have to be made and the requirements of a political campaign,” he opted out of the gubernatorial race, reiterating his commitment

migration of thousands of local residents to the U.S. mainland. The governor also took the opportunity to denounce, without naming them, several of his fellow Popular Democratic Party (PDP) members for “making solutions more difficult,” thus siding with the opposition.

Puerto Rico Debt Crisis Shrouds Washington, D.C. in controversy Few stories pertaining to Puerto Rico have captured the attention of the mainstream press as the island’s debt—a monster towering $70 billion tall. It loomed large on the horizon long before 2015, but Puerto Rico managed to keep it at bay in 2014 with a $3.5 billion deal put together by the Royal Bank of Canada, Barclays and Morgan Stanley. The bond deal gave Puerto Rico’s government

much-needed liquidity at a 10% yield no less because the island’s credit had been downgraded to noninvestment grade, or junk, in Feb. 2014, just over a year into Gov. Alejandro García Padilla’s first term as governor. No sooner had the bond deal been struck when the García Padilla administration’s economic team was seen slapping high fives, their jubilation a sign that Puerto Rico had

obtained essential financing, but at a high cost. At the same time, the deal would continue to mask a devastatingly low labor-force participation rate stuck at 40%, outmigration of Puerto Rico’s professional class and young adults to the tune of 1,000 people jetting from the island every week and an economy stuck in a nine-year funk. BY PHILIPE SCHOENE ROURA & ROSARIO FAJARDO PAGE 16-20

BY JUAN A. HERNANDEZ CONTINUES ON PAGE 4


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