Puerto Rico GDB Hired Cleary Gottlieb as Adviser Before Offering

Puerto Rico’s Government Development Bank said it hired the law firm Cleary Gottlieb Steen & Hamilton LLP as an adviser.

The appointment preceded Puerto Rico’s sale on March 11 of $3.5 billion of general-obligation bonds, Governor Alejandro Garcia Padilla said yesterday in an interview at an economic conference in West Palm Beach, Florida. The firm was hired to help Puerto Rico agencies understand how to avoid restructuring, he said.

The U.S. commonwealth’s sale was the biggest offering on record of junk-rated municipal debt. Proceeds went toward balancing budgets and refinancing debt as the territory buys time to revive a shrinking economy.

The GDB said in March that it tapped an affiliate of Millstein & Co. as a financial adviser.

Garcia Padilla is “days away” from releasing his budget for the fiscal year beginning July 1, the governor said at the International Economic Forum of the Americas conference. Garcia Padilla has said the spending plan won’t include borrowing to balance the budget, a practice used since at least 2000, according to the GDB.

Puerto Rico and its agencies owe $73 billion of debt, according to borrowing documents.

To contact the reporters on this story: Michelle Kaske in New York at mkaske@bloomberg.net; Bill Faries in West Palm Beach, Florida at wfaries@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net Mark Tannenbaum

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