Pirates Of The Caribbean (Muni-Style): Puerto Rican Bond Yield Soars To 12.30%, CDS 5Y At 2,828

In a modern day retelling of ‘Pirates of the Caribbean,’ Puerto Rico is in serious fiscal difficulty stemming from a declining population and overwhelming social safety nets.
From The Hill,
Treasury Secretary Jack Lew recently visited Puerto Rico in an effort to show the administration’s support for the beleaguered territory. Lew’s comments on his trip to San Juan and his January 15 letter to House Speaker Paul Ryan (R-Wis.) make it clear that when it comes to Puerto Rico, the administration largely equates ‘support’ with ‘bankruptcy.’
The administration’s well-intentioned desire to help the people of Puerto Rico is laudable, but it is a mistake to give Puerto Rico the power to rewrite its laws and contracts through a retroactive application of new bankruptcy laws. The administration’s position is neither good policy for Puerto Rico nor the United States.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ February 12, 2016.