Caribbean

The Oversight Board will continue to "prepare for a more dire outcome but continue to hope for the best," said Chairman Arthur Gonzalez.

The bondholders say the failure to pay them net revenues since the 2017 bankruptcy start gives rise to their administrative expense claim.

Bond parties say the board's failure to settle the PREPA bankruptcy has contributed to the system's unreliability.

The effects could hit island economies, like those of Puerto Rico and the U.S. Virgin Islands, whose bonds are speculative grade partly because of fiscal concerns.

At issue is whether PREPA bondholders may get a portion of the roughly $575 million available for unsecured claims against Puerto Rico's government

KBRA said the negative outlook reflects declining coverage of maximum annual debt service coverage from both a lower tax rate and declining rum sales.

The bond parties argue that they are due the multi-billion-dollar fee from PREPA in addition to bond pricipal and interest.

The charges related to implementation and enforcement of material nonpublic information policies and Puerto Rico bonds.

Judge Laura Taylor Swain also approved the mediators hiring PJT Partners to be their financial advisor.

The Oversight Board's effort to confirm a "a legally infirm cramdown plan is patently flawed and will add years of litigation," the bondholders said.