Main Street Bondholders is a coalition of small bondholders http://mainstreetbondholders.org/solutions-for-puerto-rico/ from across America. We’ve worked hard, saved and played by the rules. We’ve invested our retirement, college and life savings into bonds backed by the full faith and credit of U.S. states, cities and territories.
Recently, Puerto Rico’s Governor, Alejandro Garcia Padilla has said that his government will refuse to honor its debts – even Puerto Rico’s constitutional debt. He has misled Congress about the ability of Puerto Rico to pay, and has ratcheted up spending, including paying millions of dollars to consultants and law firms who are well known for advising deadbeat sovereigns. This reckless behavior is a threat to our members – whether on the mainland or in Puerto Rico – who are invested in Puerto Rico’s bonds. Our retirement savings depends on the rule of law, and the Governor and his team have shown disregard for the law and for small bondholders who live in Puerto Rico and on the U.S. mainland.
Even more worrisome for all Americans, Governor Garcia Padilla’s disregard for the rule of law could create a precedent for other states and municipalities in America to act in the same way. Make no mistake: If Puerto Rico is allowed to default on its constitutional debt, other states and cities will try to follow suit, and no retirement account in America will be safe.
Main Street Bondholders will stand up for ordinary American citizens who have savings invested in Puerto Rico’s bonds, and who would be the victims of a default by Puerto Rico. Puerto Rico has options, and contrary to the claims of Governor Garcia Padilla, can fix its problems. We are committed to a policy process that returns Puerto Rico to sound financial management, respects the rule of law, and protects our retirement savings.