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Mindset tailors a historic, bipartisan Puerto Rican debt restructuring to the satisfaction of senior bondholders while providing the island with historic debt relief.

By taking the time to understand the myriad financial and constitutional issues at play, we built the necessary trust on both sides of the aisle to craft a balanced solution.

The people of Puerto Rico had endured a decade of economic stagnation and had been shut out of the traditional municipal bond market since 2013. As a US territory, it lacked access to bankruptcy courts or sovereign restructuring tools. By the spring of 2016 when Mindset got involved, bondholders, including many retirees, vendors, and pensioners living on the island, faced the imminent threat of a disorderly default. Puerto Ricans faced protracted litigation, economic uncertainty, and further outmigration.

The challenge.

Our clients wanted reasonable recovery on their investments, but those business interests had to be balanced with the unprecedented nature of the situation provided the island’s special status as a commonwealth of the United States.

The approach.

This was a multifaceted problem, requiring a multifaceted solution. Instead of simply relaying our client’s position to lawmakers, we took the time to understand the complex debt picture with 18 different issuers, their relative priorities, legal claims, and motivations. We also sought to understand the essential must-haves for Democrats and Republicans in any compromise legislation, as well as the cross-jurisdictional challenges unique to Puerto Rico. Through this bipartisan and interdisciplinary approach, and our dogged focus on the facts, we were able to build trust and advance our client’s goals by aligning their interests with the interests of sound public policy, and the Puerto Rican people.

The solution.

We crafted a solution that respected the Puerto Rican people’s need for substantial debt relief, as well as property rights, the Constitution, and taxpayers. In so doing, we ensured a positive result for our clients while placing the island on a path toward financial stability and a more hopeful future.

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