On June 13, the US Supreme Court voted 5-2 to reject Puerto Rico’s bid to restructure portions of its massive bond debt through their own public utilities. This ruling effectively denies Puerto Rico self-control over debt management, forcing Congress to pass legislation to allow for the enactment of any debt restructuring reforms. The case at hand, Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust, marks the third consecutive ruling against Puerto Rican interests. Previously, the ruling on double jeopardy case Puerto Rico v Sanchez Valle barred Puerto Rico from prosecuting individuals previously tried in the US for the...Read More
Author: Samuel Rosin
Puerto Rico’s economy remains in shambles, and continues to block the potential bolstering of its flagging job market. However, conflicting employment statistics suggest the island may be taking fledgling steps toward economic recovery. Negative employment statistics continue to outnumber the positive, while the positive statistics offer only slightly hopeful signs. The island’s employment rate dipped a further 1.5 percent in May, the 39th consecutive month of decline. Puerto Rico lost 12,200 jobs in the private sector and another 1,600 in the public sector. The growth attempts of Puerto Rico’s most established industries continue to stall. Available construction, manufacturing, and...Read More
United States held municipal bonds have reached peak investment. Despite record-low yields due to consistently low interest rates, record high investment led municipal bond funds to accrue $632 billion in assets as of June 1. This comes in direct contrast to Puerto Rican municipal bonds. Reduced to junk status in 2014 by three major credit agencies, the island’s local, state, and national tax-exempt bonds make up the vast majority of its $70 billion debt. On May 1, Puerto Rico defaulted on the first major scheduled payment on its municipal bonds. Gov. Alejandro García Padilla warns that the country will...Read More
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