Four Lessons For Investors from Puerto Rico And Toys R Us DefaultsRupert Hargreaves
The defaults by Toys R Us and Puerto Rico were remarkably similar, even though corporate debt and sovereign debt are quite different. This article highlights three lessons that can be taken from both and one lesson that highlights a key difference between corporate and sovereign debt.
Deteriorating Slowly but Defaulting Suddenly
Both Toys R Us and Puerto Rico followed Ernest Hemingway’s description of going bankrupt “gradually, then suddenly.” For years both had limped along in financial distress, but investors continued to buy their debt. There’s a false comfort in the non-default of stressed borrowers; investors . . .
This content is exclusively for paying members.
If you are subscribed and having an account error please clear cache and cookies if that does not work email [email protected] or click Chat.