Puerto Rico Finally Faces Debt Repayment as Deficits Loom (1)

Puerto Rico’s restructuring plan would push the bankrupt island to do what it hasn’t done in more than a decade: repay debt from revenue rather than borrowed funds.

The plan requires the commonwealth to begin repaying bondholders again in January 2022 after defaulting on its general-obligation debt in July 2016 following years of borrowing to fill budget gaps and pushing principal and interest costs into the future, called “scoop and toss.”

The deal between Puerto Rico, rival bondholder groups and insurers could facilitate the island’s exit from bankruptcy this year -- if the court approves -- and cut its $18.8 ...