Morgan Stanley (MS) has contacted hedge funds, private-equity firms and other large investors to see how interested they would be in providing $2B in financing to Puerto Rico in return for yields as high as 10%, the NYT reports.
The Commonwealth hasn't actually hired Morgan Stanley, which is acting on its own to put together a proposal that the bank can take to the government.
Puerto Rico is struggling with high unemployment and massive debt, and is facing a downgrade into junk territory from Moody's. Such a move would accelerate $1B of payments.
Complicating matters is that the Commonwealth can't file for Chapter 9 bankruptcy protection.