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Puerto Rico governor Ricardo Rossello said he had sought to trigger a broad restructuring of the island’s debts on Wednesday, putting the US territory on trajectory for the largest bankruptcy-like proceeding in the $3.8tn municipal bond market in history.

The governor said he had instructed the island’s federal oversight board to commence a Title III proceeding, a process akin to bankruptcy created last year as part of Congressional approved rescue legislation.

Puerto Rico has laboured under a $70bn debt load, which the governor has sought to cut through consensual negotiations with creditors. Those talks have so far failed to produce tangible results, with investors balking at the haircuts the government has proposed.

Already, a handful of lawsuits have been filed against the commonwealth, its officials and governor Rossello.

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