Puerto Rico has another debt problem — beyond the $70 billion the island owes bondholders. Even as other parts of the U.S. have bounced back from the recession, the commonwealth is still recording “stubbornly high” mortgage delinquency rates and anemic rates of household borrowing, according to a blog post this month by the New York Fed, the Wall Street Journal reported yesterday.
Puerto Rico in Distress
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U.S. Treasury officials didn’t tell Puerto Rico to default on general-obligation bond payments, according to a lawyer representing the island in its $70 billion debt restructuring, Bloomberg News reported yesterday. “At least in my experience, U.S.
While hedge funds hold much of Puerto Rico’s troubled debt, individual investors own an estimated $15 billion in bonds — 22 percent of the island’s overall $68 billion public debt, the Associated Press reported yesterday. Many eagerly bought Puerto Rico bonds because they are exempt from state, local and federal taxes and were widely considered safe.
With Puerto Rico carrying $72 billion in debt, and an independent, federally appointed control board poised to take charge of its finances, the island’s 78 municipalities — with their mayors, employees and government offices — represent one of the island’s most intractable problems, The New York Times reported today.
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The Financial Oversight and Management Board for Puerto Rico was created under the Puerto Rico Oversight, Management and Economic Stability Act of 2016. The Board consists of seven members appointed by the President of the United States and one ex officio member designated by the Governor of Puerto Rico. Access information on the Board, documents, videos of meetings, calendar of events and live webcasts by clicking here.