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Puerto Rico Wants to Stall Creditors. That Went Badly in 1842

  • The plan revives a tactic surpassingly rare in a placid market
  • Municipalities with $1.7 trillion pension burden seek an out
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A Tale of Two Puerto Ricos

Puerto Rico may pave the way for struggling U.S. cities and states to bite the hands that fed them billions.

The U.S. territory says it can’t pay any of the estimated $17 billion due to bondholders in the next five years. If the gambit is approved by a federal financial control board and kept in place once it emerges from bankruptcy, it would be the first time a major municipal borrower formally suspended debt payments since New York City’s 1975 fiscal crisis.