In an interview with Fox News, President Donald Trump said that
Puerto Rico's debt will have to wiped out.Trump's comments were
made in an interview with Geraldo Rivera, of the Fox News network,
while in Puerto Rico. Trump visited the island on Tuesday, two
weeks after Maria destroyed Puerto Rico's entire infrastructure
"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 on Tuesday in an interview with
Fox News, according to a Reuters report.
The White House didn't immediately return CNBC's emailed
request for further details of Trump's proposal. Goldman Sachs
didn't immediately return CNBC's request for a response on the
Trump visited the island on Tuesday, two weeks after Maria
destroyed Puerto Rico's entire infrastructure system, leaving
nearly 3.5 million residents without power, and tens of thousands
without clean water.
The official death toll more than doubled to 34, a spokesman for
Governor Ricardo Rosello said on Tuesday, Reuters reported.
Even before the storm brought Puerto Rico to a near standstill, the
government there already struggled with an economy in shambles
and a default on billions of dollars of public debt.
Today, the U.S. territory has nearly $70 billion in debt, an
unemployment rate 2.5 times the U.S. average, a 45 percent
poverty rate, nearly insolvent pension systems and a chronically
underfunded Medicaid insurance program for the poor.
Puerto Rico's job base continues to shrink, taking its economy
along with it. Since the recession ended, a lack of job prospects
has sent many Puerto Ricans fleeing to the mainland, where the
job market is much stronger.
During Trump's visit on Tuesday he said that responding to the
hurricane's devastation had thrown the federal budget "out of
whack," but he praised officials and first responders for preventing
the storm from becoming a "real catastrophe" like Hurricane
In a note published last week, Moody's Investors Service said
widespread damage has reduced the economic capacity of the
island to pay, changing whatever assumptions were previously
made in the bankruptcy proceeding. The island, with $74 billion of
bond indebtedness, filed for a form of bankruptcy in May.
New York-based hedge fund Blue Mountain Capital, which has
invested in Puerto Rican debt for several years, didn't return
CNBC's emailed request for comment, which was sent outside of
Global fund manager Franklin Templeton, which said as of the end
of August it holds Puerto Rican debt through several of its mutual
funds, didn't immediately return CNBC's emailed request for
Franklin Advisers and OppenheimerFunds held a combined $10.3
billion in Puerto Rican debt as of July, making them among the
island's largest creditors, Reuters reported.
OppenheimerFunds did not immediately return CNBC's emailed
request for comment, which was sent outside of office hours.
Steven Tananbaum, chief investment officer at GoldenTree Asset
Management, said recently at a conference that he was looking at
Puerto Rican bonds related to the Puerto Rico Sales Tax
Financing Corporation (also known as Cofina).
GoldenTree Asset Management, which manages over $25 billion,
didn't immediately return CNBC's emailed request for comment,
which was sent outside of office hours.
Trump says Puerto
Rico's debt will have
to be wiped out