On 1 July 2015, the Commonwealth of Puerto Rico published a report authored by former World Bank chief economist Anne O. Krueger analysing its bond and other public debt (“Krueger Report”). The Krueger Report concludes Puerto Rico and its governmental enterprises owe $73 billion to their bond creditors. Not surprisingly, the Krueger Report also concludes that the Caribbean island sovereign with a declining population of 3.5 million residents, a declining GNP of $72 billion and trading activity closely linked to the US mainland cannot sustain its debt burden. According to the Federal Reserve Bank of New York (“NY Fed”), Puerto Rico’s public debt burden is more than 100% of its GNP, even excluding any federal debt. As the NY Fed observed, “Puerto Rico is a high debt jurisdiction relative to most of the United States...[and]...looks more like a nation than do any of the mainland states....”
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