Company: OIA
Filing Date: 2025-03-13
Form Type: 424B5
Source: 0001104659-25-023508
Chunk: 170

Company: Invesco Municipal Income Opportunities Trust
Filing Date: 2025-03-13
Form: 424B5
Chunk 170
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 restructuring of a municipality’s indebtedness, and thus all such restructurings must be pursuant to Chapter 9 of the Bankruptcy Code. The jurisdictions discussed below all face challenges to achieving sustained economic growth, which is critical to debt sustainability. Challenges include, for example, (i) the location of the islands that leads to the high cost of importing goods and energy; (ii) vulnerability to increasing frequency and severity of extreme weather events; (iii) concentrated economies relying on limited industries; and (iv) outmigration and population loss. Commonwealth of Puerto Rico Introduction. The Commonwealth of Puerto Rico (the “Commonwealth”) Government and the Financial Oversight and Management Board for Puerto Rico (the Oversight Board) together have made significant progress in achieving fiscal responsibility, stabilizing Puerto Rico’s finances, substantially reducing its debt burden, and making significant strides to reform its civil service. When the U.S. Congress passed the bipartisan Puerto Rico Oversight, Management, and Economic Stability Act of 2016 (PROMESA) that created the Oversight Board, the Governor of Puerto Rico had declared the debt unpayable, and the Puerto Rico Government was in default. Decades of economic decline and chronic financial mismanagement left Puerto Rico in crisis, soon exacerbated by natural disasters, including Hurricanes Irma and María in 2017, earthquakes, and the global COVID-19 pandemic in 2020. According to a U.S. Government Accountability Office (GAO) report from 2018, the causes of the crisis were: (i) inadequate financial management and oversight practices, such as the overestimation of potential revenues and persistent spending in excess of appropriated amounts; (ii) prolonged economic contraction, impacted by outmigration and resulting diminished labor force, the high cost of energy and importing goods, regulatory challenges to doing business, the phaseout of the possessions tax credit, and banking and housing struggles; and (iii) policy decisions, such as allowing the use of debt proceeds to balance budgets, insufficiently addressing public pension funding shortfalls, and inadequately managing the financial condition of the Puerto Rico Electric Power Authority (PREPA). Prior to PROMESA and for each of the first 16 consecutive years of this century, from fiscal years 2000 to 2016, Government spending exceeded recurring Government revenues. Controls and guardrails, to the extent they existed, were insufficient to prevent overestimation of revenues, excessive borrowing, overspending, and the deficits that eroded Puerto Rico’s economic stability. Before PROMESA, Government pensions were not sufficiently funded, putting