Puerto Rico's governor signed a law Thursday that will increase the excise tax on a barrel of crude oil by 68 percent to help generate funds and sell an anticipated $2.9 billion in bonds.
Gov. Alejandro Garcia Padilla said he plans to file additional legislation to slightly amend the new law and help the government access financial markets. Garcia called a special session on the issue late last year and legislators passed the measure. He had until Saturday to sign it.
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The tax per barrel would increase from $9.25 to $15.50 and generate about $178 million a year.
Puerto Rico has said it needs to sell new bonds to help reduce $73 billion in public debt and strengthen public corporations that are struggling financially.
Moody's has warned that the Government Development Bank's liquidity could fall as much as 22 percent if there is no new bond sale to refinance the Highway and Transportation Authority's debt. The agency owes the bank $2.2 billion, about 21 percent of its loan portfolio. If the bonds are sold, a portion of that money would be used to refinance at least $1 billion in loans made to the transportation authority.