Hedge Funds Misjudged Puerto Rico Bond Risk, Democrats Say
A Puerto Rican Flag flies in Old San Juan, Puerto Rico, on Tuesday, Aug. 18, 2015.
Photographer: Derick E. Hingle/BloombergThis article is for subscribers only.
Some hedge fund managers are trying to affect the outcome of Puerto Rico’s debt crisis to pad profits rather than accept losses from investment miscalculations, U.S. House Democrats said in a policy paper.
It is “unjust and unrealistic” to demand full repayment on investments that were known to be risky, said the study, which criticized the funds’ opposition to legislation proposed in Congress that would let Puerto Rican agencies seek Chapter 9 bankruptcy protection.