Jennifer Lopez and Shakira sparkle at
the Super Bowl
02 Feb 2020
During the show's only moment of
political frisson, Emme sang the chorus of Bruce Springsteen's Born In The USA
while Lopez draped herself in a Puerto Rican flag, a not-so-subtle dig at the
Trump administration's handling of aid for the island after it was devastated
by two hurricanes in 2017.
Puerto Ricans protest as anger rises
over unused emergency aid
23 Jan 2020
Hundreds protested in Puerto Rico
on Thursday in a demonstration reminiscent of those that ousted the island’s
former governor last year, as anger grows over emergency aid that until
recently sat unused in a warehouse amid ongoing earthquakes. Vázquez came under
fire on Saturday after an online blogger posted a live feed of a warehouse in
the southern coastal city of Ponce filled with water, cots, baby food and other
supplies dating from Hurricane Maria. A group of people broke into the
warehouse and began distributing supplies to those affected by the recent quake.
More than 4,500 people remain in shelters. The governor fired the director of
Puerto Rico’s emergency management agency shortly after the incident, as well
as the secretaries of the department of housing and family, as she blamed them
in part for not distributing the aid.
Puerto Rico in state of emergency
after most powerful quake in over 100 years
07 Jan 2020
Puerto Rico’s governor, Wanda
Vázquez, declared a state of emergency and activated the national guard on
Tuesday after a series of earthquakes including one of magnitude 6.4 that was
the most powerful to strike the Caribbean island in 102 years. The quakes
killed at least one person, provoked a protective power outage across the
entire island and cut off drinking water to 300,000 customers, Vázquez told a
news conference. The island has been rocked by a series of quakes – literally
hundreds – since 28 December, including 10 of magnitude 4 or greater. Puerto
Rico is also working through a bankruptcy process to restructure about $120bn
of debt and pension obligations. Power remained cut off to the capital San Juan
and most of the island some 11 hours after the largest quake. Vázquez, who
assumed office in August after Ricardo Rosselló stepped down in the face of
massive street protests.
Puerto Rico governor resigns after
mass protests
25 Jul 2019
Puerto Rico's Governor Ricardo
Rosselló has announced his resignation after days of mass street protests in
the US territory. He has been at the center of a group text message scandal
that has already led two top officials to resign. The leaked messages revealed
sexist, profane and homophobic comments. The chat, which contained 880 pages of
exchanges between the governor and 11 male allies, was leaked on 13 July and
led to days of protests outside the governor's mansion in San Juan. Several of
the texts mock victims of Hurricane Maria, which devastated the island in 2017
and may have led to more than 4,000 deaths. In one instance, Mr Rosselló criticized
the former Speaker of the New York City Council, Melissa Mark-Viverito, saying
people should "beat up that whore".
Police Unleash 'Brutal Attacks' on
Austerity Protesters in Storm-Ravaged Puerto Rico
02 May 2018
Police in Puerto Rico deployed tear gas and fired rubber
bullets to shut down May Day protests as thousands of people took to the
streets of the U.S. territory, which is still battling the devastation caused
by Hurricane Maria—and a debt crisis that preceded the storm. Journalist Naomi
Klein has written and spoken at length about how the island's current crisis
has been used push a "radical corporate agenda." Despite the
violence, the mass protests garnered minimal attention from the U.S. corporate
media.
Puerto Rico Hit by Island Wide
Blackout
18 Apr 2018
In what’s been called the second-largest blackout in history,
Puerto Rico lost power entirely on Wednesday — marking the second time the
island has suffered a major power failure in less than a week. Puerto Rico’s
beleaguered power authority blamed the outage on a private contractor who
accidentally downed a transmission line during unrelated power restoration
work. Officials said it could take between 24 to 36 hours for power to be
restored to nearly 1.5 million customers. The blackout comes less than a week
after a fallen tree knocked out power for about 870,000 customers.
Explosion cuts power in Puerto Rico
12 Feb 2018
An explosion and fire at a power substation caused a blackout
in parts of northern Puerto Rico on Sunday, 400 megawatts of power generation
had been lost. The fire was caused by a mechanical failure and impacted
sections of San Juan, Trujillo Alto, Guaynabo, Carolina, Caguas, and Juncos.
Puerto Rico Homeowners Brace for
Another Disaster: Foreclosures
22 Dec 2017
Lenders to Puerto Rican homeowners have kicked foreclosures
into high gear in the aftermath of Hurricane Maria, skirting local and federal
borrower protections. The foreclosure horrors add to Puerto Rico’s Dickensian
experience of late. Close to 35 percent of the island remains without power
after Hurricane Maria, with full restoration not expected until May. At least
100,000 people have left the island. Abandoned pets are everywhere. Government
services have been slashed or hobbled. Roughly one-third of 425,000 Puerto
Rican homeowners have fallen behind on mortgage payments, and with jobs scarce
after the hurricane, that number will likely grow. Foreclosures ravaged Puerto
Rico even before Maria, up 130 percent in 2016 relative to a decade before.
Adding two hurricanes to the equation makes the island’s residents ripe for a
gargantuan rip-off. In fact, the economy of the island could collapse.
Puerto Rico to cancel $300m power
deal with Whitefish, Montana company
29 Oct 2017
The head of Puerto Rico’s power company said on Sunday the
agency will cancel its $300m contract with Whitefish Energy Holdings, amid
increased scrutiny of the tiny Montana company’s role in restoring the island’s
power system following Hurricane Maria. Roughly 70% of the island remains
without power more than a month after Hurricane Maria struck as a category 4
storm with winds of up to 154mph. Federal committees have been trying to investigate
the contract awarded to the small company from the hometown of Donald Trump’s
interior secretary, former congressman Ryan Zinke. Whitefish Energy Holdings is
based in Whitefish, Montana. Zinke, a former Montana congressman, knows
Whitefish chief executive Andy Techmanski, and Zinke’s son had a summer job at Whitefish.
Puerto Rico to audit power contract
for Montana firm
25 Oct 2017
Storm-ravaged Puerto Rico has promised a full audit of a
$300m (£227m) deal won by a small electrical firm with Trump administration
connections. The chief executive of Whitefish Energy Holdings in Montana knows
US Interior Secretary Ryan Zinke, while one of its investors has donated to
Donald Trump. Whitefish Energy Holdings, a two-year-old company that has
seemingly little experience with work on this scale. The contract was inked by
Puerto Rico Electric Power Authority (Prepa) in the immediate aftermath of the
storm.
Puerto Rico Bonds Slide as Trump Says
‘Goodbye’ to Territory’s Debt
10 Oct 2017
Puerto Rico bond prices fell Wednesday after President Donald
Trump said the U.S. territory’s roughly $70 billion in debt may get out wiped
out to help the island recover from Hurricane Maria. “You can say goodbye to
that,” Mr. Trump said in an interview on Fox News during his visit to Puerto
Rico. It wasn’t immediately clear how the U.S. would do that. In trading Wednesday, benchmark Puerto Rican
general obligation bonds maturing in 2035 were at 32.75 cents on the dollar,
down from roughly 44 cents late Tuesday.
Storms complicate Puerto Rico's debt
problems
26 Sep 2017
Puerto Rico's more than $70bn in debt is casting a shadow
over recovery efforts, which was badly destroyed by Hurricane Maria. Puerto
Rico is facing the collapse of its electricity and communications network as it
evacuates flooded families and examines damaged infrastructure. A major dam is
at risk of failure. Puerto Rican Governor Ricardo Rosello warned of a
"massive exodus" without aid.
US President Donald Trump wrote on Twitter on Monday night
that the island was in "deep trouble". He added that its debts,
"sadly, must be dealt with". "Texas and Florida are doing great
but Puerto Rico, which was already suffering from broken infrastructure &
massive debt, is in deep trouble," he wrote. "Much of the island was
destroyed, with billions of dollars ... owed to Wall Street and the banks
which, sadly, must be dealt with."
Puerto Rico had been working on a financial plan with cuts
that would satisfy the federal oversight panel. But Governor Rosello told
broadcaster CNN that the hurricanes were "a game changer" for those
discussions. "This is a completely different set of circumstances,"
he said.
After Puerto Rico’s Debt Crisis,
Worries Shift to Virgin Islands
25 Jun 2017
Government officials are scrambling to stave off the same
kind of fiscal collapse that has already engulfed its neighbor Puerto Rico. The
public debts of the Virgin Islands are much smaller than those of Puerto Rico,
but so is its population, and therefore its ability to pay. This tropical
territory of roughly 100,000 people owes some $6.5 billion to pensioners and
creditors. All of America’s far-flung territories, among them American Samoa,
Guam and the Northern Mariana Islands, appear vulnerable.
Hurricane Maria, Sep 2017
Puerto Rico votes in referendum to
become US state
12 Jun 2017
The US territory of Puerto Rico has voted to ask Congress to
make it America's 51st state. More than 97% of voters favored attempting to
join the US over becoming independent or remaining a self-governing territory.
However, just 23% of the electorate turned up to cast their ballot amid an
opposition boycott, and its results are non-binding. The final decision is also
not in their hands but up to Congress.
Puerto Rico files for bankruptcy in
last-ditch attempt to sustain public services
05 May 2017
Puerto Rico has filed for a form of bankruptcy in a desperate
bid to stave off creditors and maintain essential services to its 3.4 million
citizens, nearly half of whom live in poverty. The insolvent US territory owes
more than $70bn (£54bn) in public debt. A recession spanning decades –
prolonged by the departure of multinational manufacturers, including “big
pharma” companies – and the extensive brain drain to the US mainland has left
Puerto Rico with arrears worth nearly 70% of its GDP. Unemployment is twice
that of the US and millions depend on costly government programs such as
Medicaid. On Friday, the Associated Press reported that Puerto Rico was closing
184 public schools in a bid to save millions of dollars.
Puerto Rico Religious Leaders Call
for Bankruptcy Ahead of "Vulture Fund" Deadline
25 Apr 2017
Before May, protections expire that shelter Puerto Rico from
debt lawsuits and predatory financial groups popularly known as
"vulture" funds. The Catholic Archbishop of San Juan and Puerto
Rico's Bible Society head are calling on the island's governor and oversight
board to immediately activate a bankruptcy process designed by Congress.
"If the oversight board and Governor do not act by April 28th, we fear
that Puerto Rico could be held hostage by predatory actors and 'vulture'
funds." "New austerity programs are being forced on our people and we
must now receive the debt relief we are promised. It is immoral and unethical
for any person or group to attempt to deny our people access to promised debt
relief processes."
Restructuring agreement for Puerto
Rico's utility could be in jeopardy
22 Mar 2017
A financial agreement involving Puerto Rico's largest utility
may be in jeopardy, which could put the U.S. territory's power grid at risk for
outages and hamper efforts to diversify its fuel mix. A restructuring support
agreement, or RSA, for the Puerto Rico Electric Power Authority, or PREPA, is
set to expire March 31. Unless the RSA is renewed, the territory has no other
viable options to meet its bond payment due July 1 of $455 million, which would
cause the utility to default and likely trigger power outages across the
island.
Joseph Stiglitz, the Nobel Laureate,
on Saving Puerto Rico
27 Feb 2017
“The board appointed to oversee Puerto Rico’s debt
restructuring is predicted that its proposals would turn the island’s recession
into a depression, of a magnitude seldom seen around the world — a decline of
16.2 percent of gross national product in the next fiscal year, comparable to
the experience of countries in civil wars, and Venezuela in economic crisis in
2016. Unemployment, already at 12.4 percent, would soar. The plan, which puts
the creditors’ interests above those of the island’s economy and people, will
create a debt spiral. As in Greece, the debt/gross domestic product ratio will
rise, and with it the likelihood of ever-deeper debt write-downs. American
taxpayers will lose, too, as they will pay for the costs.”
Puerto Rico Governor Weighs Asking
Creditors for More Concessions
27 Jan 2017
Many bond investors have viewed Puerto Rico’s new governor,
Ricardo Rosselló, as a likely ally in their fight to get repaid. Now that hope
is starting to dwindle. The governor struck a populist tone in a recent public
spat with the federal oversight board managing Puerto Rico’s financial
rehabilitation. Investors increasingly fear there will be a bankruptcy.
Two of Puerto Rico’s New Overlords
Are Accused of Helping Create Its Debt Crisis
16 Dec 2016
A control board, which has veto power over major Puerto Rican
budget decisions, was created by Congress in June as the island foundered under
$70 billion in public debt. Activists are calling for the resignation of two
members of Puerto Rico’s fiscal control board, Ramon Gonzalez and Carlos As
Puerto Rico’s debt rose, the island’s elected officials began pushing the
burden of repayment onto the public. Beginning in 2009, then-Gov. Luis Fortuño
instituted major austerity measures, laying off tens of thousands of public
employees.
Puerto Rico: Huge blackout after
power plant fire
21 Sep 2016
A big fire at a power plant has left 1.5 million people
without electricity in the US territory of Puerto Rico. The fire affected two
transmission lines and caused the collapse of the electricity system across the
island. Puerto Rico's Electric Power Authority has been undergoing
restructuring and is seeking funds to update what it says is outdated
equipment. The cause of the fire is still unclear. The blackout also caused 15
fires across Puerto Rico as a result of malfunctioning generators.
White House Announces Puerto Rico
Oversight Board Membership
01 Sep 2016
The White House is announcing members of Puerto Rico's fiscal
oversight board established as part of legislation to address the US
territory’s debt crisis. The board is responsible for triggering debt
restructuring on the island and approving the Governor's budget. Four of the
seven board members are Puerto Rican. The legislation additionally put a stay
on debt lawsuits against Puerto Rico and granted the island tools to
restructure all of its debt. Puerto Rico owes over $70 billion overall and
defaulted on $2 billion in debt on July 1. The island is in the midst of a
decade-long recession, has an unemployment rate more than double the national
rate and nearly half its population lives in poverty.
Obama Appoints Social Security Critic
to Fix Puerto Rico’s Budget
31 Aug 2016
Andrew Biggs, an American Enterprise Institute resident
scholar and architect of conservative efforts to cut and privatize Social
Security, has been named by President Obama to a seven-member fiscal oversight
board for the debt-ridden U.S. territory of Puerto Rico. The oversight board is
tasked with balancing Puerto Rico’s budget and pursuing all avenues to pay off
its massive debt, including cuts to the island’s education, police, and health
care systems.
Puerto Rico to default on $779m debt
01 Jul 2016
Puerto Rico announced on Friday that it would default on
$779m (£588m) of debt. Debt payments totaling just over $2bn were due on
Friday. US President Barack Obama signed a bill into law on Thursday giving the
island access to a debt restructuring process and halting any litigation
arising from defaults. As part of the US law, the island's finances will soon
come under a US federal oversight board. Puerto Rico has been struggling to
make payments on its $70bn debt load.
Treasury Secretary Reminds Senate It
Has 4 Days Before Puerto Rico Defaults On More Debt
27 Jun 2016
Treasury Secretary Jack Lew sounded the alarm Monday on the
looming deadline for the Senate to pass legislation to help Puerto Rico with
its debt crisis. The commonwealth owes a $2 billion debt payment on July 1, and
its government has said it will default. Without action, Puerto Rico could be
exposed to a flurry of lawsuits, which could lead to hospital closures and
squeeze the island’s police force, education system and other services. The
House has passed a bill to help the island restructure its debt, but the Senate
has yet to vote on it.
House Passes Puerto Rico Oversight,
Management, and Economic Stability Act (PROMESA)
09 Jun 2016
The U.S. House of Representatives has passed legislation to
provide restructuring authority for Puerto Rico’s massive debt and establish an
oversight board to address the territory’s fiscal crisis. Puerto Rico faces a
debt payment on July 1 of roughly $1.8 billion.
Sanders to Senate Dems: Do You Stand
with Puerto Rico or with Wall Street?
23 May 2016
As a U.S. House committee prepares to take up the Puerto Rico
Oversight, Management and Economic Stability Act (PROMESA) on Tuesday, Bernie
Sanders opposes the bill. PROMESA would allow Puerto Rico to restructure $72
billion in debt, while establishing an unelected outside control board to
oversee the territory's fiscal matters—a top demand from Republicans. The board
would not be subject to any Puerto Rican authority and is bound by PROMESA to
make decisions that are in the interests of Puerto Rico’s creditors. Sanders
blasted the creation of this "undemocratic board," which he said
"would have the power to slash pensions, cut education and health care,
and increase taxes on working families in Puerto Rico."
Republicans, Obama Administration
Reach Agreement on Puerto Rico Restructuring Bill
19 May 2016
WASHINGTON—House Republicans reached an agreement with the
Obama administration to provide Puerto Rico a path to restructure its $70
billion debt load. The bill would offer the island a legal out similar to
bankruptcy and wouldn’t commit any federal money, a critical requirement to
winning support of conservatives. Puerto Rico has defaulted on different
classes of bonds, including earlier this month when it missed most of a $422
million payment, and faces payments totaling $2 billion on July 1.
This Nuyorican Superhero Represents
Hope And Solidarity For Puerto Ricans
17 May 2016
Puerto Rico just got a kickass Afro-boricua superhero! Her
name is name is La Borinqueña, and she’s on a mission to help the Puerto Rican
community unite and fight for social justice. Named after Puerto Rico’s
national anthem, La Borinqueña was created by Brooklyn-based artist and writer
Edgardo Miranda-Rodriguez in response to the island’s current financial crisis
and is intended to be a symbol of hope and solidarity. The cover art for the
comic book, due out this fall, features La Borinqueña soaring above fellow
Puerto Ricans Sonia Sotomayor, Arturo Schomburg, Lolita Lebron, Felicita Mendez,
Hector Lavoe, among others.
Sanders Blasts 'Vulture Capitalists' and Colonialism in Puerto Rico
16 May 2016
Campaigning in Puerto Rico on Monday, Bernie Sanders railed
against the "colonial-like relationship" that has allowed Wall Street
"vulture capitalists" to profit off the debt-stricken territory's
economic crisis. "It is unacceptable to me for the United States
government to treat Puerto Rico like a colony during a time when its people are
facing the worst fiscal and economic crisis in its history," the presidential
hopeful declared in a rousing speech at a packed town hall in San Juan.
"What vulture funds on Wall Street are demanding is that Puerto Rico fire
teachers, close schools, cut pensions and abolish the minimum wage so that they
can reap huge profits off the suffering and misery of the children and the
people of Puerto Rico," Sanders said. "We cannot allow that to
happen. We will not allow that to happen."
John Oliver explains Puerto Rico’s
debt crisis.
Puerto Rico to default on debt
payment after talks fail
02 May 2016
Puerto Rico has halted a $422m debt payment due on Monday
after talks to ease the US territory's crisis ended without a deal. Governor
Alejandro Garcia Padilla said in a televised speech he had issued an executive
order suspending payments. A further debt payment of $1.9bn is due in July.
Some creditors have argued that the territory has exaggerated its crisis.
Congress is in recess until the week of 9 May.
Puerto Rico’s House Passes Emergency
Debt Moratorium Bill
06 Apr 2016
Puerto Rico’s House of Representatives early on Wednesday
passed an emergency bill allowing the government to halt payments on its debt,
throwing into doubt broader restructuring plans to stave off a financial
collapse of the U.S. Commonwealth. The measure would allow Governor Alejandro
Garcia Padilla to declare a moratorium on any debt payment he deems necessary,
and also alter the structure of the Government Development Bank. Garcia Padilla
is expected to quickly sign the bill into law. Burdened by a $70 billion debt
load it says it cannot pay and a 45 percent poverty rate that has led to a
steady exodus of its American citizens to the mainland, Puerto Rico faces
economic collapse without a solution that either changes laws and/or involves
an agreement with creditors. The introduction of the law had drawn a quick
rebuke from creditors who hold the Puerto Rican government’s General Obligation
debt.
Plan to Rescue Puerto Rico Advances,
Led by House Republicans
24 Mar 2016
Politicians in Washington are coalescing around a financial
plan to rescue Puerto Rico, just weeks before an expected major default on bond
payments that would spread more turmoil through the island’s shaky economy. The
plan would not grant Puerto Rico’s most fervent request: permission to
restructure its entire $72 billion debt in bankruptcy. It would, however, give
the island certain crucial tools that bankruptcy proceedings can offer — but
only if it first comes under close federal oversight. The creation of such a
board has been highly controversial on the island, where some residents and
officials have called it an act of “colonialism”. If Puerto Rican officials are
unable to make the budget balance with existing resources, the oversight board
would have the power to do it for them — which could mean cuts in services.
Much of the rescue package has been drafted in the House Natural Resources
Committee under its chairman, Rob Bishop of Utah. Although the Natural
Resources Committee might seem an odd place to resolve an offshore financial
collapse, the committee has jurisdiction over America’s territories, which
include Puerto Rico.
How Free Electricity Helped Dig $9
Billion Hole in Puerto Rico
01 Feb 2016
The power authority has been giving free power to all 78 of
Puerto Rico’s municipalities, to many of its government-owned enterprises, even
to some for-profit businesses — although not to its citizens. It has done so
for decades, even as it has sunk deeper and deeper in debt, borrowing billions
just to stay afloat. Now, however, the island’s government is running out of
cash, facing a total debt of $72 billion and already defaulting on some bonds —
and an effort is underway to limit the free electricity. The free power dates
from 1941. Hearings will begin to determine who and what are to blame for the
authority’s larger problems, especially its ancient and inefficient power
plants, among the last in North America to burn oil. Culprits are expected to
include the authority’s secretive purchasing managers, elected officials who
wasted money on natural gas pipelines that were scrapped and an institutional
hostility to wind and solar power that is hard to fathom on a breezy island
where the sun shines most days.
Faced with $9M in Debt, Puerto Rico’s Utility
Appeals for Restructuring
28 Jan 2016
Puerto Rico’s main electricity provider and its bondholders
are continuing negotiations to restructure almost $9 million in debt after failing
to meet a deadline Friday that caused a tentative pact reached last month to be
terminated. The restructuring support agreement between the Puerto Rico
Electric Power Authority and its creditors expired after lawmakers failed to
pass legislation by Friday to enable Prepa, as the agency is known, to lower
its obligations and implement a new customer surcharge. In a sign of progress,
banks that finance its fuel purchases and the utility entered into a
forbearance agreement on Sunday that keeps their negotiations out of court
through Feb. 12.
Faced with $9M in Debt, Puerto Rico’s
Utility Appeals for Restructuring
28 Jan 2016
Puerto Rico’s main electricity provider and its bondholders
are continuing negotiations to restructure almost $9 million in debt after
failing to meet a deadline Friday that caused a tentative pact reached last
month to be terminated. The restructuring support agreement between the Puerto
Rico Electric Power Authority and its creditors expired after lawmakers failed
to pass legislation by Friday to enable Prepa, as the agency is known, to lower
its obligations and implement a new customer surcharge. In a sign of progress,
banks that finance its fuel purchases and the utility entered into a
forbearance agreement on Sunday that keeps their negotiations out of court
through Feb. 12.
Puerto Rico: US calls for creditors
to make sacrifices
20 Jan 2016
US Treasury Secretary Jacob Lew urged Puerto Rico's creditors
to make sacrifices that would allow the territory to restructure its debt. Mr.
Lew said that unless both sides made sacrifices, "there is no path out of
insolvency and back to growth." Puerto Rico is in its tenth year of
rescission and struggling to cope with $70bn in debt. Negotiations between the
Puerto Rican government and creditors have failed. Puerto Rico defaulted on part
of its debt at the beginning of January and is on track to miss larger payments
in the coming months. Puerto Rico does not have access to Chapter 9 of the US
bankruptcy code, the provision that allowed cities such as Detroit to
restructure their debts. Puerto Rico, with support from President Obama, is
pushing Congress to change that law and grant them permission to use the
Chapter 9 provision. In 2015 a US judge struck down a law passed by the Puerto
Rican government that would have allowed it to restructure its debt.
Puerto Rico misses second major debt
payment as economy struggles
05 Jan 2016
Puerto Rico has defaulted for the second time in five months,
as the island struggles with massive debt obligations and a flagging economy.
Last week, the island's governor said it would pay most, but not all, of the
nearly $1bn it owed. Overall, the island has a total debt load of about $70bn,
which Governor Padilla has said the island cannot pay. "This is not
political rhetoric, this is mathematic," Mr. Padilla said. "It's very
simple, we don't have the money to pay".
Governor Alejandro Padilla has called for the island to be
granted bankruptcy rights like those on the mainland. The US Congress is set to
debate the issue in the coming weeks. In recent months, the governor has
repeatedly warned of a humanitarian crisis that could unfold and has called on
the US Congress to extend bankruptcy protections to the island. US states and
territories cannot declare bankruptcy under federal law. Puerto Rico's public
utilities are heavily debt-burdened, but are not allowed the bankruptcy rights
that their mainland counterparts are afforded.
The island has been called the "Greece of the
Caribbean”. The flagging economy and uncertainty is driving mass emigration,
with an average of about 230 people leaving per day. Unemployment on the island
stands at 12.5% - around twice that of the US - and around 45% of people living
in poverty. The island faces a bill of around $400m due in February and a much
larger $1.9bn bill in July.
Inside the Billion-Dollar Battle for
Puerto Rico’s Future
19 Dec 2015
On the surface, it is a battle over whether Puerto Rico should
be granted bankruptcy protections, putting at risk tens of billions of dollars
from investors around the country. But it is also testing the power of an
ascendant class of ultrarich Americans to steer the fate of a territory that is
home to more than three million fellow citizens. The investors with a stake in
the outcome are some of the wealthiest people in America.
For decades, the island had been borrowing money to pay its
bills. Puerto Rico’s bonds were particularly attractive to mutual funds because
they were exempt from federal, state and local taxes in all 50 states. But in
2013, after the island’s general obligation bonds were downgraded, they caught
the attention of a different sort of investor: hedge funds specializing in
distressed assets. These funds began buying up the debt at a steep discount,
confident that this was a bet they could not lose. Not only were the bonds
guaranteed by the Puerto Rican Constitution, but under a wrinkle of federal
law, the island’s public corporations and municipalities — unlike those of the
50 states — do not have bankruptcy as a recourse. Drawn by the promise of what was a 20 percent
return, Mr. Paulson’s firm purchased bonds in March 2014, as did Appaloosa
Management, founded by David Tepper; Marathon Asset Management; BlueMountain
Capital Management; and Monarch Alternative Capital. Puerto Rico now owes its
creditors in excess of $70 billion, as much as a third of it is owed to hedge
funds.
Puerto Rico narrowly avoids default
01 Dec 2015
Puerto Rico has narrowly avoided a default by making a last
minute payment on its outstanding debt. The Government Development Bank made a
$355m (£235m) payment that was due to creditors on Tuesday. Despite the move
the territory is struggling to find money for government services and future
debt payments. The Governor said the territory is facing a situation where it
must decide between defaulting- failing to make the payments on its debt- or
cutting public services. Though Puerto Rico is a territory of the US it is not
entitled to restructure its debt in the same way that state and city
governments are. Representatives from Puerto Rico - including the Governor -
have been making the case that the island should be allowed to undertake the
same process Detroit used when it faced bankruptcy.
Puerto Rico economy: Government
defaults on bond payment
04 Aug 2015
Puerto Rico has confirmed that it failed to make a debt
payment at the weekend, in the latest sign of the economic crisis in the US
territory. The government said it did not have the funds available to pay more
than $50m (£32m) due on bonds. Puerto Rico's governor said in June that the
island's debts of more than $70bn were unpayable and that its finances needed
restructuring. Economists say that Puerto Rico's financial woes run deep and
will take years to sort out .
Puerto Rico has $72bn (£46bn) of public debt. That makes it
by far the most indebted territory or state per capita in the United States.
Unemployment is at almost 14% - more than double the national average - and
over the last decade there has been little or no growth, resulting in the
economy teetering on the brink of oblivion.
The island has been losing 1% (around 30,000 people) a year to Florida
and other parts of the US. And it is mainly the economically active young who
are leaving.
