You took on risk. You lost. That’s life. Now think of the victims of Hurricane Maria.
Is it possible that Puerto Rico’s bondholders are finally coming to their senses? For a few of them at least, it certainly looks like an overdue change of heart has taken place. And to think: All it took was a Category 4 hurricane that destroyed the island.
It’s hardly a secret, of course, that Puerto Rico owes its bondholders far more money than it can ever possibly repay: a staggering $74 billion for an island with population that hovers around 3.2 million. (By contrast, the nation of Argentina, which had a population of 37 million when it defaulted in 2001, owed its bondholders only $6 billion more at the time.)
But while the debt has received a great deal of attention in the three weeks since Hurricane Maria hit — especially once President Donald Trump started mentioning it in tweets — Puerto Rico has been struggling to find a way out of its predicament at least since the summer of 2015, when the government first began defaulting on bond payments.
Bloomberg View
By Joe Nocera
October 11, 2017, 9:26 AM MDT