Puerto Rico’s Sales-Tax Bond Deal Wins Approval from U.S. Judge

Puerto Rico won court approval for its plan to restructure more than $17 billion of sales-tax bonds, marking a major step in the island’s effort to slash its massive debts.

U.S. District Court Judge Laura Taylor Swain signed off on the restructuring and an agreement to split sales-tax revenue between bondholders and the central government, an arrangement that will help determine how much of the revenue will be available for other major creditors.

The restructuring of the sales-tax bonds, know as Cofinas, would be the biggest yet completed by Puerto Rico, moving it closer to emerging from the bankruptcy that ...