The US territory of Puerto Rico is the oldest colony in the world. Part of the United States since 1898, the Caribbean island with a predominantly Spanish-speaking population of over 3.7 million has often been promoted as a candidate to become the nation’s 51st state.
But May 3, 2017 marked the beginning of a new era for the island, coming over 523 years after being discovered by Christopher Columbus during his second expedition to the New World, as Puerto Rico’s territorial government filed for bankruptcy, just over one year after it first defaulted on paying its debts, and nearly 10 months after it began defaulting on its constitutionally guaranteed debt. Reuters describes the magnitude of the event and what finally touched it off:
Puerto Rico announced a historic restructuring of its public debt on Wednesday, touching off what may be the biggest bankruptcy ever in the $3.8 trillion US municipal bond market.
While it was not immediately clear just how much of Puerto Rico’s $70 billion of debt would be included in the bankruptcy filing, the case is sure to dwarf Detroit’s insolvency in 2013.
The move comes a day after several major creditors sued Puerto Rico over defaults [of] its bonds.
This post was published at FinancialSense on 05/04/2017.
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