The Wall Street Journal reports that the U.S. Treasury moved on Tuesday to block U.S. investors from purchasing Russian debt in secondary markets. As a response to the Russian invasion of the Ukraine, Treasury had originally prohibited the purchase of newly issued Russian government and corporate debt but Treasury has now expanded that policy to include new and existing debt and equity securities issued by any entity in the Russian Federation. Under the new rules, investors can continue to hold already issued debt and remain free to sell or transfer securities as long as they do so to a non-U.S. counterparty. [WSJ; June 7, 2022]
Bloomberg reports the Puerto Rico's will be hosting its first annual event for bondholders since its bankruptcy in 2017. Notably, in 2017, the Commonwealth of Puerto Rico filed for bankruptcy, becoming the largest municipal bankruptcy in U.S. history. In March 2022, Puerto Rico formally exited bankruptcy after completing the largest public debt restructuring in U.S. history, nearly five years later. As part of an effort to put slash the commonwealth's deficits, officials will be hosting a two-day conference in San Juan, in which local business leaders will attempt to convince more investors to buy into the economy so that bonds can move out of the hands of hedge funds and other distressed debt purchasers. This conference will also be overseen by the oversight board which Congress created in 2016 to help resolve Puerto Rico's financial crisis. Such board will ensure bondholders get repaid. [Bloomberg; June 6, 2022]
The USA Today reports that JetBlue Airways Corp. will bolster its efforts to purchase budget airline, Spirit Airlines. Initially, JetBlue offered $3.6 billion in cash and then launched a $3.2 billion tender offer in an attempt to ward off a rival bid by Frontier Airlines, another budget airline. Intensifying the bidding war between the 2 companies, Frontier added a $250 million termination fee to its initial proposal. In response, JetBlue announced that it will provide a $350 million reverse break-up payable to Spirit if the deal isn't completed due to anti-trust reasons, over $150 million more than JetBlue's initial bid. Spirit is expected to vote on these proposals on June 10th. [USA Today; June 6, 2022]
The Wall Street Journal reports that the developer of American Dream, the $6 billion mega-shopping mall in East Rutherford, New Jersey, has failed to make a semiannual interest payment on its $800 million issuance of municipal bonds. As a result, bondholders were paid from an $11.35 million debt service account, rather than receiving their interest payments directly. American Dream is the second largest mall in the country and is located near the Meadowlands Sports Complex (a popular concert venue and home to several major league sports teams). The developers issued $2.7 billion of debt to build the mall but faced years of construction delays, followed by closures due to the coronavirus pandemic. [WSJ; June 3, 2022]
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