WASHINGTON, March 15, 2016 /PRNewswire-USNewswire/ -- In response to Senator Bob Menendez's announcement that he is sponsoring legislation to allow Puerto Rico to violate its own Constitution and restructure all of its debt, Main Street Bondholders released the following statement:
Democratic Senator Bob Menendez, who last year was indicted on charges relating to his relationship with a wealthy campaign donor, put the Super Territories Restructuring contagion in motion yesterday, by sponsoring legislation which mirrors the Treasury's plan to override the rule of law in Puerto Rico.
As a litany of state governors have already warned, the precedent established by the Super Territories plan for high-spending states like New Jersey will drive up borrowing costs for states across the board.
In New Jersey, where general obligation bonds were already downgraded last year, this will make it even harder to fund infrastructure projects like the long-awaited Hudson River rail tunnel, for which New Jersey has agreed to foot the bill for several billions in funding.
"With statements like this, Senator Menendez is actively driving down the value of New Jersey's own municipal debt," said Main Street Bondholders member and New Jersey resident George Carroll. "Not only does that threaten the value of funds held by bondholders, it makes it even harder than it already is for New Jersey to borrow at reasonable rates."
Senator Menendez was always a likely candidate to support whatever plan the Obama Administration put out. With statements like this, however, the senator is working against his own constituents and state government. This is the beginning of the Super Territories contagion in action.
Main Street Bondholders Coalition is a project of the 60 Plus Association, and is comprised of small bondholders from across America who are committed to a policy process that returns Puerto Rico to sound financial management, respect for the rule of law, and the protection of their retirement savings.
SOURCE Main Street Bondholders