Puerto Rico is possibly the most financially distressed political entity in North America. The most widely available statistic is that the island has $73 billion in debt.  However, if one considers unfunded pension liabilities some estimates place Puerto Rico’s debt at $167.46 billion.

Parent company guarantees and performance bonds are typically used in the construction and engineering industries to provide a developer with some security in the event that the contractor breaches the building or engineering contract or, in some circumstances, upon the contractor's insolvency.

In the current economic climate, contractor default is, unfortunately, even more prevalent in the construction and engineering industries, and so the issues surrounding parent company guarantees and performance bonds are very much in focus for developers.