UPDATE 1-U.S. Treasury's Lew meets with Puerto Rico bondholders

Treasury Secretary Jack Lew met with Puerto Rico bondholders on Friday, urging them to take part in an effort to restructure the U.S. territory's debt.

Lew told the group of bondholders that Puerto Rico needs an "orderly restructuring" of its debt that would require approval by U.S. Congress.

"Lew urged all stakeholders to come to the table," a Treasury representative said in a statement. "He warned that a disorderly default - a likely outcome in the absence of Congressional action - could trigger protracted and costly litigation."



Puerto Rico, with around $70 billion debt, in January asked its creditors to take a huge "haircut" that would slash its total outstanding debt by about $23 billion in an opening salvo to resolve a crippling debt crisis. Creditors immediately reacted with frustration, calling the offer "not credible," "not serious" and a "trial balloon."



Lew on Friday reiterated previous comments that Puerto Rico urgently needs federal legislation to establish an orderly process for the territory to restructure its debts, alongside independent fiscal oversight.

U.S. Treasury Secretary Counselor Antonio Weiss will be a witness at a U.S. House of Representatives committee hearing next week on Puerto Rico, after which lawmakers are expected to begin drafting legislation.



Republicans plan to bring a bill addressing Puerto Rico's debt crisis to the floor of the House by the end of March.

(Reporting by Jason Lange in Washington and Megan Davies in New York; Editing by Chizu Nomiyama and Matthew Lewis)

UPDATE 1-U.S. Treasury's Lew meets with Puerto Rico bondholders