Solution Seen

Brigade and Fir Tree are part of the group of 38 funds that own $5.2 billion of Puerto Rico debt and commissioned the report from the former IMF economists. Spokesmen for the firms declined to comment.

The report drew from an analysis released by the Puerto Rican government in June, which said officials need to cut spending and take other steps to revive the economy, such as cutting the island’s minimum wage below the federal $7.25 level, easing job-security rules and reducing welfare benefits.

The critics who rallied at City Hall attacked some hedge funds for advocating such measures.

Like Minds

As for bankruptcy, some hedge-fund managers holding general-obligation bonds, including Fir Tree, agree with de Blasio. They say changing the law would create a framework to help creditors get repaid. They also previously offered to assist with a $2.9 billion bond sale to raise cash for Puerto Rico.

Firms such as Marathon Asset Management, which hold bonds in Puerto Rico’s electric utility, known as Prepa, say that far from exploiting the situation, they hold the promise of helping the island recover without the need for bankruptcy. The firm is one of several creditors that hired lobbyists to kill the congressional proposal.

Angelo Gordon and D.E. Shaw are also working to defeat the bill. Spokesmen for each company declined to comment.

Utility bondholders want to negotiate directly with the agency.

The creditors proposed an $8.1 billion debt exchange that would stretch out payments over several years while giving the agency time and capital to upgrade its infrastructure. The new debt would be paid off through a surcharge imposed on the rate the utility charges its customers.