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SAN JUAN, Puerto Rico (AP) — Puerto Rico on Monday released a new proposal to restructure part of its $70 billion debt to buy time to implement a fiscal growth plan as multimillion-dollar payments loom for a U.S. territory facing dwindling cash reserves. Government officials propose to exchange $49 billion of debt into up to $28 billion of base bonds and nearly $2 billion of tax-exempt capital appreciation bonds. Officials said the voluntary exchange proposal would allow creditors to recover the full principal they invested regardless of future economic growth rates. The plan also includes a special clause for those who live in Puerto Rico and hold certain bonds. Officials said that group could receive up to $8 billion of local holder base bonds that repays the full principal they originally invested at a 2 percent interest rate. Government officials said Puerto Rico could cut $12 billion to $16 billion from its debt load under the new deal. They said this would allow the government to keep providing essential services, pay back local vendors and suppliers, boost liquidity and fund retirement systems, among other things. "The fact is that we will only be able to address these issues by working together," said Secretary of State Victor Suarez. Investors' groups have proposed tougher terms. They did not return a message for comment on the new plan, which could mean a loss for some. Puerto Rican officials said they discussed the plan with investors' advisers in late March. David Tawil, co-founder and portfolio manager of New York-based Maglan Capital, said bondholders will likely not consider the deal aggressive enough, but said it was a smart move by government officials amid uncertainty of how courts and U.S. Congress will respond to the island's economic crisis. "This is a good-faith effort in the sense that it's holistic," he said in a phone interview. "It provides for varying types of recovery depending on whether you want to be part of (Puerto Rico's) future or whether you want to go ahead and cash out in your investment immediately." Earlier this month, a group of investors holding $5 billion worth of general obligation bonds offered to defer repayment of nearly $2 billion in principal for the next five years to help the island avoid a default in July. They also offered $750 million in liquidity through another general obligation bond sale. Puerto Rico's government rejected the deal, saying it would only incur more debt and lead to cash shortfalls. Government officials say the new deal would reduce the debt service-to-revenue ratio on tax-supported debt from 36 percent to 15 percent; they note that's still higher than the most indebted U.S. states. Creditors, however, have questioned the validity of financial statistics that Puerto Rico's government has provided. The plan comes as Puerto Rico urges U.S. Congress to approve a debt-restructuring mechanism. The local government recently approved a debt-moratorium bill and declared a state of emergency at the Government Development Bank, which issues loans and oversees debt transactions. The move means in part that officials will only allow withdrawals to fund necessary costs for health, public safety and education services. It does not place a moratorium on the bank's principal or interest payments. Officials have warned the bank could default on a nearly $423 million payment due to creditors in May. ___ Danica Coto on Twitter: www.twitter.com/danicacoto

Puerto Rico unveils new restructuring deal as cash dwindles