World Economy

Insurers Sue Puerto Rico

Insurers Sue Puerto RicoInsurers Sue Puerto Rico

Insurance companies that guarantee Puerto Rico municipal debt filed a lawsuit challenging the commonwealth’s decision to divert revenue designated for some bonds to pay other creditors, Bloomberg reported. Ambac Financial Group Inc. and Assured Guaranty Ltd. said the clawback of revenue pledged to bond issues violates the US Constitution by interfering with debt-holders’ contractual rights. The suit filed in US District Court in Puerto Rico seeks to have the clawback declared unlawful and asks the court to issue an injunction against implementation, according to a statement. “This may well just be the beginning,” Mark Palmer, a managing director at BTIG LLC who analyzes Puerto Rico and municipal bond insurers, said Friday.