Any finance company that puts together a bond deal that exceeds government income for the year at an 8+ percent interest rate (plus charges 3 percent of the funds raised for administration, and another 2 percent as deal closer) is a predatory lender.
It will never get paid off, much less paid off by 2020 when the bonds mature. To close budget gaps, the government went with this deal which gave 112% of the yearly tax collections to simply finance the GAP for the following 12 month, money that ran out in just 8 months.
No sane person would give them a loan, not with those kinds of numbers. Even Greece doesn’t monkey THIS badly.
Default is really the only answer.
you can’t have a ‘predatory lender’ without ready prey
meaning, the bank did not create the government’s fiscal situation. nor could the bank force the government to take out the loan, or any loan for that matter from them
(there are many other banks around the world, and private sources of funds, no governent has to do any specific deal with any specific bank)
just saying. the problem lies in PR, not Wall Street. The most one can reasonably say about the bank is that it (unlike many other lenders) was willing to lend money to a poor credit risk - and that the bank charged enough to, in its estimation, bedge the high risk of doing so. There are almost always some lenders who are willing to do some high risk loans provided, of course, they can justifying them with commenserate rates/fees. If PR’s credit was in decent condition, it could have found lower rate funds... probably from the same bank... or at least from any number of others. SO again, the primary problem lies with the politicians running PR, not with Wall Street.
just my opinion.