What have you always wondered about the economy? Tell us

It looks like Puerto Rico can restructure its debt

Andy Uhler May 20, 2016
HTML EMBED:
COPY
Puerto Rico is taking the first step toward ending its decadelong recession. Filipa Rodrigues/Marketplace

It looks like Puerto Rico can restructure its debt

Andy Uhler May 20, 2016
Puerto Rico is taking the first step toward ending its decadelong recession. Filipa Rodrigues/Marketplace
HTML EMBED:
COPY

Puerto Rico is one step closer to figuring out what to do about its outstanding debt and addressing its decadelong recession. The U.S. territory still won’t have Chapter 9 bankruptcy protection, but this oversight bill allows the island a legal out to restructure its debt.

Bondholders are sure to be upset because they’ll likely take a haircut. Puerto Rican officials don’t like the idea of a board that would oversee the island’s finances and argue the bill doesn’t address the basic economic problems plaguing the island. The tax base is leaving, and there’s little incentive to start small businesses there. 

Some Democrats have argued that pensions for retired government employees need to take precedent over bond repayment. Along with the more than $70 billion in bond debt, the island is sitting on more than $40 billion in unfunded pension liabilities. 

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.