SAN JUAN, Puerto Rico _ Puerto Rico reached an agreement with the U.S. Treasury Department that will allow it to access loans that Congress approved to help the bankrupt island recover from the financial toll dealt by Hurricane Maria, promising to release funds that have been held up by negotiations.
The deal was announced after Treasury Secretary Steven Mnuchin met with Gov. Ricardo Rossello in San Juan. Mnuchin traveled there to finalize talks after local officials complained that the administration was delaying loans needs to rebuild.
Rossello told reporters that Puerto Rico will get a portion of $4.9 billion of loans as needed, with the money set to be released once the government's funds drop below $1.1 billion.
The heavy damage from Hurricane Maria in September exacerbated the existing financial and economic strains on Puerto Rico, which has already been pushed into bankruptcy by more than $70 billion of debt. Thousands of residents remain without power and the island's electric company averted the need to impose rolling blackouts only because of a loan from the central government that was supposed to tide it over until federal money arrives.
The anticipated influx of funds for rebuilding is expected to boost the pace of the island's economy. That's lifted the price of Puerto Rico bonds on speculation that investors will recover more than had been expected, pushing general-obligation debt due in 2035 to more than 35 cents on the dollar from as little as 21 cents in early December.
