U.S. Markets closed

Puerto Rico Board Releases Emergency Funds After Earthquake

Michelle Kaske and Jonathan Levin

(Bloomberg) -- Puerto Rico will have access to $260 million of emergency funds to help recovery efforts after a series of earthquakes struck the island, including a 6.4-magnitude temblor early Tuesday.

The total economic impact, including disruption due to damage and also power outages, could reach $3.1 billion, according to Chuck Watson, a disaster modeler with Enki Research in Savannah, Georgia.

Puerto Rico’s financial oversight board Tuesday approved tapping into the emergency funds through Jan. 31, according to a letter the panel sent to the commonwealth government and posted on the board’s website. Puerto Rico can use more than two-thirds of the $374 million available in the emergency fund, according to Matthias Rieker, the board’s spokesman.

“We will continue to support the government during this difficult time and make sure funds for recovery are available,” Jose Carrion, chairman of the financial oversight board, said in a statement Tuesday.

Along with the emergency fund, federal disaster aid may help Puerto Rico repair from the earthquakes. Peter Gaynor, deputy administrator of the Federal Emergency Management Agency, in a tweet Tuesday expressed his agency’s support.

“We have teams in Puerto Rico, New York and D.C. working hard to aid the ongoing response to the recent earthquakes on the island,” Gaynor said in the tweet. “I spoke with Governor @wandavazquezg earlier and assured her we will continue to work in partnership to support the Commonwealth during this time.”

Florida Senators Marco Rubio and Rick Scott, along with Jenniffer Gonzalez, Puerto Rico’s non-voting representative in Congress, urged President Donald Trump in a letter Tuesday to approve the commonwealth’s request for disaster aid.

The bankrupt commonwealth has been plagued by natural disasters in recent years. Hurricane Maria slammed into Puerto Rico in 2017 just two weeks after Hurricane Irma caused damage to the island. Maria destroyed Puerto Rico’s electrical grid and killed thousands of residents.

Governor Wanda Vazquez signed an emergency declaration to give the government the fiscal flexibility to respond quickly to the earthquake, the governor said Tuesday morning during a press conference in Caguas, about 20 miles (32 kilometers) south of San Juan. In a tweet Tuesday morning, Vazquez suspended work of non-emergency government employees.

Tuesday’s earthquake caused a major blackout and killed at least one person and injured several others, El Nuevo Dia reported.

The earthquake hasn’t caused a sell-off in Puerto Rico bonds. Trades of at least $1 million of sales-tax debt maturing in 2053 changed hands at an average 106.4 cents on the dollar Tuesday, up from 105.5 cents the day before, according to data compiled by Bloomberg. A $1 million trade of general obligations with an 8% coupon and maturing in 2035 changed hands at 65.5 cents on the dollar, up from an average 63.6 cents on Jan. 2., Bloomberg data show.

(Updates with amount of estimated economic impact in the second paragraph and comment from financial oversight board chairman in the fourth paragraph.)

To contact the reporters on this story: Michelle Kaske in New York at mkaske@bloomberg.net;Jonathan Levin in Miami at jlevin20@bloomberg.net

To contact the editors responsible for this story: Elizabeth Campbell at ecampbell14@bloomberg.net, Michael B. Marois, William Selway

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.