Puerto Rico revival needs death-and-tax certainty 29 Aug 2018 The official death toll from last year’s hurricane has just jumped almost 50-fold. The delay is emblematic of San Juan’s longer-term problems tracking and recording everything from paying workers to collecting taxes. Without improvement, it’ll be tough for the island to prosper.
Puerto Rico deaths will take toll on debt talks 29 May 2018 Last year’s hurricane ultimately killed some 5,000 people, a new study claims. That’s more than perished in Katrina in New Orleans or the Sept. 11 attacks. The extraordinary number will buttress the federal overseer trying to curtail payments on the island’s $70 bln of debt.
Puerto Rico budget ignores the human element 27 Apr 2018 The bankrupt island’s federal oversight board certified plans that include cuts to pensions and other austerity measures. Some are in line with what Puerto Rico’s governor proposed. But they don’t adequately address the risk of yet more working-age people jumping ship.
Trump gets Puerto Rico priorities in a muddle 4 Oct 2017 The president’s vow to wipe out the U.S. commonwealth’s debt sent its bonds plunging. The devastation wrought by Hurricane Maria may necessitate another restructuring. But it doesn’t address the island’s problems. Its citizens need money, supplies and services, not distraction.
Viewsroom: Trump tax overhaul will be a long slog 28 Sep 2017 The U.S. president and Republicans want to reduce the corporate tax rate to 20 pct from 35 pct. After a blistering defeat over Obamacare, the prospects of significant reform are slim. Meanwhile, Equifax’s CEO slinks out of the building. Plus: Puerto Rico’s prayer for relief.
U.S. will pay for Puerto Rico one way or another 26 Sep 2017 The already-bankrupt commonwealth is reeling from the devastation wreaked by Hurricane Maria. Blackouts may persist for months even as a $72 bln debt bill looms. Without swift and generous aid from Washington, a mass exodus for the mainland will only increase the ultimate cost.
Hadas: Puerto Rico, Greece and bad-faith debt 17 May 2017 Both the U.S. territory and the euro zone laggard have fine beaches, irresponsible governments and a debt crisis. The most just and helpful response to such debacles is to force reckless lenders to write off loans. That’s a hard sell. Thankfully, few sovereigns are so careless.
Puerto Rico restructuring will be no day at beach 3 May 2017 Congress gave the U.S. territory access to a form of bankruptcy. Now the board overseeing its finances, encompassing $70 bln of debt, has pressed the button. Creditors will get their day in court, and tidy plans in spreadsheets could end up as warped as in Detroit – or worse.
Castro embodied the weakness of strongmen 26 Nov 2016 The charismatic Cuban leader resembled other paternalistic caudillos of right and left in his outsized ego, which ultimately stymied his people. Cubans, like other Latin Americans, need institutions more than saviors like Fidel. Venezuela's leaders are another example.
Puerto Rico law just first step in fiscal fix 30 Jun 2016 The U.S. Senate late on Wednesday passed a framework for the territory to restructure some $70 bln of debt. Puerto Rico, however, also faces an economic crunch and a healthcare crisis. Giving it a version of the Chapter 9 bankruptcy process is only chapter 1 in its rehab.
Guest view: U.S. inaction on Puerto Rico risks chaos 27 Jun 2016 The island territory can no longer make debt payments, its economy is in free fall, foreclosures are surging and citizens are fleeing, says Moody’s Analytics Chief Economist Mark Zandi. To avoid a humanitarian crisis, the Senate needs to pass the PROMESA act without delay.
Puerto Rico fix gives everyone something to hate 19 May 2016 U.S. lawmakers’ latest effort to provide a framework for the island to restructure $70 bln of debt would impose strong oversight. While it appears to bolster senior creditors’ claims, holdouts could end up with a bigger haircut than they’d like. That makes it a decent compromise.
Puerto Rico creditors making perfect enemy of good 10 May 2016 A bill to cut the U.S. territory’s $70 bln debt stalled amid fierce lobbying by bondholders that insist on full repayment. New but similar legislation offers a chance to get the island back on track. Though no one wants a haircut, a messy default could be far more costly.
Puerto Rico moral-hazard critique is wide of mark 20 Apr 2016 A bill allowing the U.S. territory to restructure $70 bln of debt has stalled, with critics arguing imprudent states might try to follow suit. Yet relief for the island would come with pain. And a process which forces a haircut on creditors could be just what the market needs.
Puerto Rico’s 46 pct haircut may grow, not reduce 1 Feb 2016 The broke U.S. territory is suggesting creditors write off nearly half some $49 bln of debt. There’s also an earnout if – big if – growth picks up enough. Puerto Rico would still be heavily indebted. Lenders will see it as an opening gambit, but they need to accept reality, too.
Puerto Rico exposes dearth of bond vigilantes 7 Jan 2016 Tax perks and a thirst for yield meant bond buyers tolerated bad fiscal practices for years. They only seriously pushed up borrowing costs after the island’s $70 bln debt crisis became all too obvious. Foolish financial crowds had better wise up to other U.S. danger zones.
Puerto Rico debt payment marks end of fiscal rope 1 Dec 2015 The cash-strapped U.S. territory scraped together $355 mln for creditors, avoiding default on its government-guaranteed debt. A $945 mln payment due on Jan. 1 will be harder to deliver. Unless Congress offers relief soon, bondholders will still face a messy restructuring.
U.S. election complicates Puerto Rico repair job 3 Nov 2015 President Obama wants Congress to help the island out of a $72 bln hole. His calls for debt restructuring, better oversight, tax and healthcare tweaks make sense, but risk falling prey to candidate posturing. It may take a full financial meltdown for D.C. to roll up its sleeves.
Treasury’s Puerto Rico superbond looks half baked 15 Oct 2015 The U.S. territory and the federal government have discussed swapping some of the island’s $72 bln debt for a new bond paid from a Treasury-run kitty. The idea is politically fraught and may not work. It’s a poor substitute for a financial control board or Chapter 9 bankruptcy.
Puerto Rico woes come with systemic silver lining 8 Jul 2015 Fears that the commonwealth will default on its debt have whacked bond insurers’ shares. Unlike 2008, though, the likes of MBIA and Assured Guaranty now back only a small fraction of the markets they operate in. That should prevent too much pain spreading beyond their walls.