Can Puerto Rico escape its $72 billion debt trap and avoid Greece’s fate?

Can Puerto Rico escape its $72 billion debt trap and avoid Greece’s fate?

Brian Gendreau, University of Florida

To almost no one’s surprise, Puerto Rico missed a US$422 million debt payment earlier this month, triggering fears among investors that additional defaults are on the way and increasing pressure on Congress to act.

The warnings that this would happen could hardly have been louder. The major credit rating agencies long ago cut Puerto Rico’s $72 billion in debt to some of the lowest levels. Its bonds have been trading at steep discounts to their face value for several years. And in December, Puerto Rico Governor Alejandro García...