Pimco Backs House's Puerto Rico Legislation as Way Out of Crisis
- Firm adds to bond-industry backing for pending House bill
- Congressional action may lag until July default looms
This article is for subscribers only.
The U.S. House bill that would establish a federal oversight board for Puerto Rico and give it powers to reduce the island’s $70 billion of debt would be a “satisfactory resolution” to the commonwealth’s worsening crisis, according to Pacific Investment Management Co.
In an online posting Tuesday, Pimco, which doesn’t own any of the territory’s securities, said the legislation wouldn’t trigger higher borrowing costs for other municipal issuers, a concern raised by some Republicans in Congress. The legislation is pending in the House Natural Resources Committee, which canceled a planned vote this month so it could address criticism from lawmakers of both parties.