A closer look
When Puerto Rico needed cash, Wall Street gladly served as the enabler, right up until the island financially suffocated. They created COFINA bonds, which were uniquely backed directly by the territory's sales tax. Investors loved them because they were tax-exempt and offered juicy yields. But when the debt spiraled to $72 billion, vulture funds bought the distressed debt for pennies and aggressively sued the bankrupt territory for full repayment. The resulting legal bloodbath forced the government to gut public services just to pay off speculators who had gambled on the island's collapse.
