Puerto Rico is facing the largest municipal debt restructuring in US history after its plan was approved by Justice

Connection modification plan Of the debt approved on Tuesday, proposed by the federally appointed Financial Supervisory Board, includes agreements between a series of creditors, reducing $33 billion of debt securities to $7 billion. Annual debt payments will bereduced by 80%.

The plan also includes safeguard measures that limit the amount of debt Puerto Rico can take on in the future, according to Reuters news agency.

Getting out of bankruptcy will allow Puerto Rico to weather defaults, encourage new investment to boost its battered economy, and rehabilitate its infrastructure, including its weak power grid.

In announcing her decision, Judge Swain noted that the plan has “broad but not universal support,” with many public sector workers and retirees, among others, disagreeing with certain aspects.

The oversight board said that under the plan, most retired officials would receive their full pensions. but nevertheless, The plan eliminates defined-benefit retirement programs that cover tens of thousands of teachers and judges.

In a statement Tuesday, the board said it welcomed Swain’s decision, but Puerto Rico “needs to continue reforming itself to ensure a prosperous future.”

This ruling, he added, “does not preclude further investigation, whether through regulatory, law enforcement or civil litigation channels, into the origins of Puerto Rico’s debt crisis.”

The debt adjustment plan is expected to go into effect on March 15. The oversight board will remain in place until Puerto Rico has had four consecutive years of balanced budgets.

The case has cost about 1 billion dollars in legal feesWhich also drew criticism.

Although it is a massive restructuring, this is not the first time that a US region has sought to get rid of its debt under court supervision.

Detroit (Michigan), Jefferson County (Alabama), Orange County, and the cities of Stockton, San Bernardino (California) have taken the same path in the past to clean up their finances, despite Puerto Rico being the largest domestic debt restructuring in US history.

The JSF stated that after approving the amendment plan, “today begins a new chapter in Puerto Rico’s history.”

Puerto Rico’s governor, Pedro Pierluisi, praised Judge Swain’s decision via a series of seven tweets in which he spoke of the island’s “transcendent moment” and said that while the agreement “is not perfect, it is very good for Puerto Rico.”

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