Puerto Rico: How To Play Hardball With Bondholders

How much of its more than $8 billion in debt can the essentially bankrupt Puerto Rico Electric Power Authority pay back?

A federal oversight board appointed four months ago to supervise debt restructuring for the entire Puerto Rican government offered up an indication last week. The board, empaneled in October under the auspices of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) and tasked with helping Puerto Rico address its deepening financial crisis, posted a letter to Gov. Gov. Ricardo Rosselló that sketches a broad path toward fiscal stability for the commonwealth.

One...