No Debtor Is An Island
So Puerto Rico is now officially broke:
"We're going to protect our people," the governor said hours after the territory was hit with multiple lawsuits from creditors seeking to recuperate the millions of dollars they invested in bonds issued by Puerto Rico's government, which has declared several defaults amid a 10-year recession.How bad do things have to be when you can say, "At least we're not Puerto Rico?"
Rossello said one of the lawsuits sought to claim all revenues generated by the island's Treasury Department for bondholders.
"I'm not going to allow that to happen," he said.
Rossello said the debts of some agencies will be restructured in court, while others will be resolved through negotiations with bondholders. He said he did not yet have details on the breakdown of those debts. The island's Electric Power Authority owes some $9 billion, the Aqueducts and Sewer Authority has roughly $5 billion in outstanding debt and the Highways and Transportation Authority owes around $7 billion.
Overall, Puerto Rico has $73 billion in public debt. By comparison, the U.S. city of Detroit had less than $20 billion in overall debt when it filed for bankruptcy in 2013, which was the biggest U.S. municipal bankruptcy ever.