(Bloomberg) A group of more than 35 hedge funds has gone from standing ready to pour more than a billion dollars into cash-strapped Puerto Rico to preparing for battle against the island territory — and one another — in a default. Governor Alejandro Garcia Padilla triggered the unraveling of a potential $2.9 billion oil-tax bond deal for PR’s Government Development Bank by signaling his desire to restructure the island’s debt rather than raise new capital, according to three people with direct knowledge of the matter.
The hedge funds that were preparing to fund the bulk of that deal are now focusing on ways to protect their stakes, including through litigation.
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