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Puerto Rico asks U.S. for credit lines after Maria - governor
September 28, 2017 / 7:24 PM / in 18 days

Puerto Rico asks U.S. for credit lines after Maria - governor

Puerto Rico's Governor Ricardo Rossello (C) talks to a woman during a distribution of relief items, after the area was hit by Hurricane Maria in San Juan, Puerto Rico September 24, 2017. REUTERS/Alvin Baez

(Reuters) - Puerto Rico will ask the U.S. Federal Reserve and Treasury for lines of credit “at reasonable rates” as it struggles to rebuild after Hurricane Maria, Governor Ricardo Rossello said on Thursday.

Maria, the most powerful hurricane to hit the U.S. island territory in nearly 90 years, swept across the island last Wednesday, knocking out the territory’s entire power grid, unleashing severe flooding and causing widespread heavy damage to homes and infrastructure.

“We are not going to have revenues in the next couple of months so that puts us in a bind,” Rossello told CNBC in an interview, pointing to a number of emergency sources of funding that the island would use.

“Lastly we are asking the Fed and Treasury to offer Puerto Rico lines of credit at reasonable rates,” he added.

As of Thursday, the Fed had “not received a request at this time,” a spokesman said. The Treasury did not immediately respond to a query.

It is unclear how the Fed might set up such a lending facility given that it cannot buy municipal debt, and that Congress limited its lending authorities in the wake of a major expansion of credit to address the 2007-2009 financial crisis.

U.S. House of Representatives Speaker Paul Ryan said on Thursday that $6.7 billion in approved hurricane relief funding would be given to federal emergency officials in two days to help victims of three recent storms, including the most recent one that hit Puerto Rico.

Reporting by Yashaswini Swamynathan in Bengaluru and Jonathan Spicer in New York; editing by Patrick Graham

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