Puerto Rican Debt Investors Could Take 50% Haircut

The clock is ticking on Puerto Rican debt restructuring, with a February deadline looming and the potential for variable investor haircuts – potentially as high as 50% to 60% -- being considered, according to a source involved in the negotiations. The silver lining for investors may be the issuance of GDP-linked bonds that provide investors a higher return correlated to the island’s economic success.

A February deadline looms on Puerto Rican debt

With nearly $70 billion in government debt, Puerto Rico, an unincorporated US territory, owes creditors more than $19,000 per citizen. With...