Editor’s note: Puerto Rico is about to default on its $72 billion debt, and its government would like to file bankruptcy — something a commonwealth, unlike a city, is prohibited from doing. Now, there are questions about whether Puerto Rico’s debt crisis might become a national political issue. Puerto Rico Gov. Alejandro García Padilla is calling on U.S. lawmakers to allow for a bankruptcy filing from the island. He told Telemundo: “Puerto Ricans decide the elections in Florida. That’s very important. By deciding the election in Florida, we can decide [who is the next] president of the United States.” So how did Puerto Rico find itself financially cornered? This story, originally published in April by Centro de Periodismo Investigativo in Puerto Rico, describes how hedge funds acquired 40 to 50 percent of Puerto Rico’s debt.
By Joel Cintrón Arbasetti
Centro de Periodismo Investigativo
Just as a vulture is a bird of prey that feeds on dead flesh, a vulture fund is an investment firm with a similar taste: its main food source comes from countries in crisis, especially from public corporation debt. And those firms have already landed in Puerto Rico, after their journey through countries in economic ruin such as Argentina, Greece, and Spain.
In Puerto Rico, vulture funds hunger after, for example, the debt of the Puerto Rico Aqueduct and Sewer Authority (PRASA), for the high cost of water ensures profit. Already three vulture funds have acquired almost all of PRASA’s debt………read more