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Home>UPDATE: Can Trump really 'wipe out' Puerto Rico's debt?

UPDATE: Can Trump really 'wipe out' Puerto Rico's debt?

UPDATE: Can Trump really 'wipe out' Puerto Rico's debt?

10/04/2017

By Sunny Oh

White House budget chief says Trump was merely saying territory needs to resolve debt woes

President Donald Trump put Puerto Rico's catastrophic debt situation, worsened by Hurricane Maria, in the spotlight on Tuesday night, saying the U.S. territory's substantial debt burden should be wiped out to aid its recovery.

But it's unclear if the White House can offer a helping hand in what have been prolonged and tense negotiations between bondholders and the Puerto Rican government. The territory is weighed down by $72 billion of debt.

"You know they owe a lot of money to your friends on Wall Street. We're going to have to wipe that out. You can say goodbye to that, I don't know if it's Goldman Sachs (GS), but whoever it is you can wave goodbye to that," Trump said in a prerecorded interview that aired on Fox News during the president's visit to the U.S. territory.

See: Puerto Rico's debt will have to be wiped out, Trump says (http://www.marketwatch.com/story/puerto-ricos-debt-will-have-to-be-wiped-out-trump-says-2017-10-03)

Puerto Rico's dicey finances have hindered its recovery. Moody's Analytics estimates the damages from Hurricane Maria will total $95 billion, a burden for a territory that struggled to pay its existing bondholders before the storm.

With its economy in tatters and citizens dealing with a loss of power and other key services, the impetus for some form of debt relief has grown.

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