Puerto Rican bonds took a huge hit on Wednesday following President Donald Trump’s comments on the island’s massive debt.
Puerto Rican bonds took a huge hit on Wednesday following President Donald Trump’s comments on the island’s massive debt.
The island’s general obligation bonds, which yield 8 percent, dropped to just 34 cents on the dollar, according to Bloomberg data.
On Tuesday night, Trump told Fox News that Puerto Rico’s debt will have to be wiped out. « They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out. You’re going to say goodbye to that, I don’t know if it’s Goldman Sachs, but whoever it is you can wave goodbye to that, » Trump said.
The president made his remarks after a visit to the U. S. territory. Two weeks ago, Puerto Rico was ravaged by Hurricane Maria, a Category 4 storm that left most of the population without electricity and water.
« This is not something a president should be doing or can do, » said Larry McDonald, head of the U. S. macro strategies at ACG Analytics. « It’s just noise and it’s pretty far removed from reality. »
« This is not a dictatorship. We have bankruptcy judges and the rule of law, » McDonald said. « But it is scaring the bond market. »
