who does puerto rico owe money to

Hedge funds that few Americans have ever heard of are also on the hook for billions in Puerto Rican debt. delayed one disaster relief bill for months. Bondholders, most of whom haven't been paid for over a year, have long realized there will be losses. Another key player: Aurelius Capital Management, a New York hedge fund that lists nearly $500 million in Puerto Rican bonds. All times are ET. Puerto Rico, Trump tweeted, owes "billions of dollars" to "Wall Street and the banks, which, sadly, must be dealt with.". They owe a lot to retirees who bought their municipal bonds. In May 2007, local economists expressed serious concerns when it was revealed that the Puerto Rico public debt equaled to 76% of its gross national product (GNP), making it one of the most indebted countries by percentage in the world, even more than the United States. President Trump seems pessimistic about Puerto Rico's ability to pay its debts. Like all Americans, the people of Puerto Rico went to the polls on Tuesday. Investors piled into Puerto Rican bonds over the last decade, enabling the island's unsustainable spending-spree along the way. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. The bulk of aid dollars is still in Washington, much of it waiting on processes that require officials to submit a series of plans outlining how they expect to use the money and await federal approval. But it could help revive the island's economy and prevent more residents from fleeing. On June 30, 2016, US President Barack Obama signed the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, which empowered him to appoint a seven-member Financial Oversight and Management Board, with ultimate control over the Commonwealth's budget and the power to negotiate the Commonwealth's debt restructuring. President Donald Trump falsely claimed in a pair of tweets Thursday that Congress had "foolishly" sent $92 billion of aid money to Puerto Rico, which “squandered away or wasted” much of it. Currently, the U.S. territory is over $70 billion in public debt.. Question: This is the second tweet about Puerto Rico where our President brought up debt. PREPA, the island's electric utility, filed for bankruptcy in July after Puerto Rico's oversight board rejected a restructuring agreement with bondholders. San Juan Mayor Carmen Yulin Cruz urged Trump not to confuse Puerto Rico's debt problems with its humanitarian crisis. Monarch Alternative Capital. In reality, most of that money is owed to everyday investors. Who does Puerto Rico owe? All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2019 and/or its affiliates. The devastation wrought by Hurricane Maria has shined a bright light on this glacial process that threatens to complicate the island's recovery efforts by cutting the territory off from borrowing money for years. --CNNMoney's Patrick Gillespie, Jill Disis and Julia Horowitz contributed to this report. That view may, in part, reflect his own financial experience there, where he once got stung by a … FCO Advisors, a hedge fund run by former Goldman Sachs municipal banker Hector Negroni, is sitting on more than $400 million of Puerto Rican bonds as well. They kept buying Puerto Rican debt even as the island fell into an 11-year recession that deepened the debt crisis. All rights reserved. "Think of Maria as a bomb. Headquarters: 535 … PROMESA en… Long before Hurricane Maria left millions on the island without power or water, Puerto Rico was battling a financial crisis years in the making. However, @EconRivera does the exact opposite in the chart she shares, attached, purporting to show how the US capitalist imperialists are taking money from Puerto Rico. The amount of money owed by Puerto Rico's pensions in 2019. They owe a lot to Puerto Ricans. Puerto Rico is widely expected to miss most, if not all, of the $2 billion bond payment it owes creditors by July 1. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. ....of which was squandered away or wasted, never to be seen again. All rights reserved. Puerto Rico was ravaged by Hurricanes Irma and Maria almost two years ago. The difference is this is our country, not someone else's," he said. Billions of Dollars in Disaster Aid Owed to Puerto Rico Continues to be Illegally Delayed by HUD. Some have already agreed to take them. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. I know the people of Puerto Rico well, and they are great. "It's not as though these are vultures circling around the island.". Less than 25% of Puerto Rican debt is held by hedge funds, according to estimates by Cate Long, founder of research firm Puerto Rico Clearinghouse. There is some evidence that money and relief have been wasted — aid and food have rotted amid mismanagement, and a corruption scandal recently erupted involving the alleged embezzlement of $15.5 million in federal funding between 2017 and 2019 — but there is no evidence that tens of billions of federal dollars have met this fate. For instance, Autonomy Capital, a New York hedge fund run by former Lehman Brothers banker Robert Gibbins, owns nearly $1 billion of Puerto Rican general obligation bonds, according to court documents filed this summer. Jane C. Timm is a political reporter for NBC News. You can also find out immediately by using one of two key online search resources. Trump signed another aid bill in June that will send an additional $1 billion to the island. The island will receive additional funds from the Federal Emergency Management Agency; The Washington Post reported that an Office of Management and Budget estimate of the possible liabilities over the life of the disaster could reach as high as $50 billion under the Stafford Act, though the estimate is expected to change and that number would take many years to reach. Federal aid won't erase Puerto Rico's mountain of debt. A Puerto Rico debt crisis of epic proportion is officially underway. Trump is framing the US response in Puerto Rico as an act of charity and goodwill. First published September 27, 2017: 2:35 PM ET, These are your 3 financial advisors near you, This site finds and compares 3 financial advisors in your area, Check this off your list before retirement: talk to an advisor, Answer these questions to find the right financial advisor for you, An Insane Card Offering 0% Interest Until Nearly 2020, Transferring Your Balance to a 14-Month 0% APR is Ingenious, The Top 7 Balance Transfer Credit Cards On The Market Today, Get $300 Back With This Outrageous New Credit Card. There are several ways to find out if you have missing money, including visiting one of your state’s official unclaimed property outreach events. History. Puerto Rico's crippling debt load -- totaling $73 billion -- forced the island to file in May for the biggest U.S. municipal bankruptcy in history. Congress has allocated $42.5 billion in disaster aid for Puerto Rico, according to federal data, but the island had received less than $14 billion through May. He reportedly opposed sending aid to the island so much he delayed one disaster relief bill for months. … With Puerto Rican infrastructure destroyed and their economy in ruins, how does Trump expect them to pay back their debt? Claim: "Puerto Rico got 91 Billion Dollars for the hurricane, more money than has ever been gotten for a hurricane before." Another bonus: Puerto Rico's debt is "triple tax-exempt." We all know Puerto Rico is a moneymaking machine for the United States of America. © 2020 Cable News Network. Most of this money comes from tax dollars paid by the people. The island says it doesn't have enough money to … The rest of the debt is owned by individuals and mutual funds that are held by mom-and-pop investors. The system allowed Donald trump, to declare bankruptcy in Puerto Rico over a deal that backfired on a golf course. Up until now, Puerto Rico's messy battle with its bondholders has played out in court, with dozens of cases being fought by parties that often have competing interests. ... over 40 percent of all households in the states will not earn enough money this year to owe … Business. These risks forced Puerto Rico to pay high rates that lured bond investors searching for healthy returns in a world of historically-low interest rates. Puerto Rico faces $5.4 billion of bond payments over the next 12 months, showing the pressure on the Caribbean island as it moves closer toward defaulting on its debt. The U.S. territory defaulted Aug. 3, handing over only 1% of the $58 million owed. Though they don’t owe taxes on individual income, like other Americans, Puerto Ricans pay business, payroll, and estate taxes. Factset: FactSet Research Systems Inc.2019. For nearly seventy years, these politicians have continued to bleed the island, steal from their own people, deceive them every four years…and now they present the people of Puerto Rico with the bill…a $72 billion public “debt.” THEY are the ones who owe $72 billion…not the people of Puerto Rico. President Trump pointed out Puerto Rico's "massive debt" problems on Monday. Congress has allocated $42.5 billion to disaster relief for Puerto Rico, according to federal data, but the island had received less than $14 billion through May. Some of the biggest holders include mutual funds run by household names like OppenheimerFunds, Franklin Templeton, Goldman Sachs (GS), BlackRock (BLK) and T. Rowe Price. All Rights Reserved. Exactly how much does Puerto Rico owe?. Even though bona fide residents of Puerto Rico do not have to pay federal income taxes on income sourced from Puerto Rico, the situation is different if you are self-employed. President Donald Trump falsely claimed in a pair of tweets Thursday that Congress had "foolishly" sent $92 billion of aid money to Puerto Rico, which “squandered away or wasted” much of it. Morningstar: © 2019 Morningstar, Inc. All Rights Reserved. If you're a bona fide resident of Puerto Rico during the entire tax year, you generally aren't required to file a U.S. federal income tax return if your only income is from sources within Puerto Rico. He called for something like the Marshall Plan, the massive federal aid provided by the U.S. to rebuild Western Europe after World War II. High unemployment forced hundreds of thousands of residents to flee the island, further eroding the tax base. Less than 25% of Puerto Rican debt is held by hedge funds, according to estimates by Cate Long, founder of … You put people above debt," she told CNN. What giving God gives him the right to enter Puerto Rico and Delare bankruptcy and now to stop Puerto Rico from doing the same. What the president may not realize is that Puerto Rico funds … Some of the $15 billion Congress approved for hurricane relief after Harvey hit will be used for Puerto Rico. Trump to Puerto Rico.....You already owe too much money. During the campaign, Trump vowed not to bail out Puerto Rico. Maria led to the deaths of at least 2,975 people, making it among the deadliest natural disasters in U.S. history. Nearly 300 bond mutual funds own Puerto Rican debt, according to data compiled by Morningstar. Most stock quote data provided by BATS. There is hope that Hurricane Maria -- and the federal attention it requires -- could be the catalyst to break the logjam. But aid has been slow to reach the island for a number of reasons, including Trump himself. Tax Breaks . Moreover, the population that Puerto Rico has managed to retain is aging rapidly. Aurelius, run by Mark Brodsky, won big by playing hardball with Argentina for years following that country's default. Related: A night of desperation in San Juan's sweltering airport. How much federal aid will Puerto Rico get? "It's the federal government's job to step in and get Puerto Rico rebuilt," said Rousseau. Trump's tweets come amid widespread protests in Puerto Rico for the governor to resign amid a corruption scandal, but it isn’t Trump’s first time misleading on Puerto Rico’s recovery. Puerto Rico owes bondholders $74 billion and current and retired government employees another $49 billion in pension benefits. Puerto Rican Debt Claimed in Court: $606,600,000. The Florida firm manages about $150 million of insured Puerto Rican bonds owned by individuals. Disclaimer. Puerto Rico will help you make the most of any money you've invested in your lifetime.The island has several tax-related incentives to draw in non-Puerto … Long said that the tweets from Trump, who has ample bankruptcy experience himself, may signal he's willing to bring the various parties to the bargaining table to reach a deal. Puerto Rico has had access to just $1.5 billion in disaster aid since Congress approved a $19.9 billion grant after the hurricanes. For the latest business news and markets data, please visit CNN Puerto Rico's debt crisis may also be eased by Washington. Editor's note: This story has been revised to reflect updated statistics from Morningstar on the number of bond funds that own Puerto Rican debt. I have no argument with the numbers used on the government transfer from the United States to Puerto Rico, which is the top half. "You don't put debt above people. The United States sends $17 billion in welfare funds to Puerto Rico every year. To date, Puerto Rico has received 7.5 percent of the $20 billion in community development block grants owed to it by HUD, despite the fact that HUD announced the … Puerto Rico’s debt is in the form of municipal bonds that we were sold to individuals, mutual funds and institutions. Claim: “Trump Made Puerto Rico’s Debt Worse After His Golf Course Filed For Bankruptcy" He’s repeatedly said that Puerto Rico got $91 billion in aid, that they’ve wasted it, and complained that Congress should stop giving them money. A Warner Media Company. Of course, reaching a deal to renegotiate Puerto Rico's debt means that bondholders will have to take losses, known as "haircuts." However, it's clear that Puerto Rico, which is a U.S. territory, needs federal disaster aid. That means owners of the bonds don't face federal, state or local taxes on the interest they earn. This is more than twice the amount given to Texas & Florida combined. Washington owes Puerto Ricans a future based on democratic legitimacy and a financially and socially viable development strategy—a development strategy that is more than a set of tax breaks for profitable U.S. corporations.” Read more of the U.S. obligation to Puerto Rico here. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. They owe a lot to people who bought bond funds that bought their municipal bonds. Puerto Rico is slowly moving toward ending its debt crisis…. But much of their leadership is corrupt, & robbing the U.S. Government blind! What's more, the aid Puerto Rico received is a fraction of what it needs — Hurricane Maria inflicted an estimated $90 billion in damage on the island. In reality, most of that money is owed to everyday investors. The island owes retirees about $55 billion. "For the most part, Main Street America owns this debt," Long said. This "maddening process" makes it "so bloody hard to get any kind of resolution," said John Rousseau, director of fixed income at Cumberland Advisors. ... the woman in line to be Puerto Rico’s next ... have to resume making debt payments and the relief money will taper off. With the protection thaf the bill gave from lawsuits, the governor of Puerto Rico, Alejandro Garcia Padilla, suspended payments due on July 1. CNN Sans™ & © 2016 Cable News Network. The White House is expected to send another request for disaster spending in mid-October. "Puerto Rico cannot go forward with all of this litigation hanging over it," Long said. Individuals and mutual funds that bought their municipal bonds is expected to another... In a world of historically-low interest rates: $ 606,600,000 to individuals, mutual funds own Rican... And prevent more residents from fleeing paid by the people of Puerto owes! 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