Skip To Content
JEWISH. INDEPENDENT. NONPROFIT.
Fast Forward

Seth Klarman Resists Efforts To Write Down Puerto Rico Debt

Billionaire investor Seth Klarman on Wednesday resisted calls for Puerto Rico’s debt to be wiped out and said the island’s residents will be better off in the long run if obligations are honored.

Klarman comments came in an email to investors, offering fresh details about how his $30 billion hedge fund Baupost Group sees its bet on Puerto Rican bonds after Hurricane Maria, which largely destroyed the island’s infrastructure.

“In the case of Puerto Rico, expunging the debt would almost certainly eliminate any ability the Commonwealth would have to borrow money in the future at reasonable rates, which will be critical to the island’s rebuilding efforts,” Klarman wrote in the email seen by Reuters.

Baupost is one of many Wall Street firms that stands to potentially lose money on investments in Puerto Rican real estate and debt as the U.S. territory struggles to rebuild.

Calls to forgive Puerto Rico’s more than $70 billion in outstanding obligations have mounted in recent weeks, as much of the island still has no electricity or running water.

But in his email, Klarman contended that wiping out the debt would hurt residents by undermining Puerto Rico’s ability to access credit markets.

A message from our CEO & publisher Rachel Fishman Feddersen

I hope you appreciated this article. Before you go, I’d like to ask you to please support the Forward’s award-winning, nonprofit journalism during this critical time.

We’ve set a goal to raise $260,000 by December 31. That’s an ambitious goal, but one that will give us the resources we need to invest in the high quality news, opinion, analysis and cultural coverage that isn’t available anywhere else.

If you feel inspired to make an impact, now is the time to give something back. Join us as a member at your most generous level.

—  Rachel Fishman Feddersen, Publisher and CEO

With your support, we’ll be ready for whatever 2025 brings.

Republish This Story

Please read before republishing

We’re happy to make this story available to republish for free, unless it originated with JTA, Haaretz or another publication (as indicated on the article) and as long as you follow our guidelines. You must credit the Forward, retain our pixel and preserve our canonical link in Google search.  See our full guidelines for more information, and this guide for detail about canonical URLs.

To republish, copy the HTML by clicking on the yellow button to the right; it includes our tracking pixel, all paragraph styles and hyperlinks, the author byline and credit to the Forward. It does not include images; to avoid copyright violations, you must add them manually, following our guidelines. Please email us at [email protected], subject line “republish,” with any questions or to let us know what stories you’re picking up.

We don't support Internet Explorer

Please use Chrome, Safari, Firefox, or Edge to view this site.