Citigroup Inc., which is helping to oversee the financial restructuring of Puerto Rico’s development bank, is reaching out to a group of large bondholders to lay the ground work for confidential debt talks, according to two people with knowledge of the matter.
The New York-based bank is seeking to establish goals for negotiations that would rope in as many as seven hedge funds that own the debt issued by the Government Development Bank for Puerto Rico, said the people, who asked not to be named because the information is private. The Puerto Rico government unveiled its restructuring outline on Wednesday.
Citigroup is the lead broker-dealer for the reorganization of debt issued by the GDB and other parts of the U.S. territory, meaning it’s responsible for structuring the obligations and facilitating the transactions. It has been talking with members of a group of bondholders represented by the law firm Davis Polk & Wardwell LLP and the financial advisory firm Ducera Partners, the people said.