Puerto Rico is not Detroit

|By:, SA News Editor

"The principal difference between Detroit and Puerto Rico is that Detroit wanted to default and Puerto Rico doesn't want to default," writes Christian Herzeca. Puerto Rico cannot file for Chapter 9 and has no desire to face creditors in a restructuring outside of a court-supervised process.

Puerto Rico clearly faces issues, but its pension reform concluded earlier this year shows the territory not only needs public finance markets, but - unlike Detroit - places a good deal of importance on continued access to them.

Bond insurers Ambac (AMBC), Assured Guaranty (AGO), and MBIA (MBI) have all taken a hit of late over Puerto Rico worries. Might there be an opportunity?

See also: Puerto Rico concerns are overdone, and the panic may be helping the bond insurers.