Vacation Home
He’s the largest investor in the biggest bank, Popular Inc., and according to a person with knowledge of the matter, bought more than $100 million of Puerto Rico’s municipal debt. Paulson’s new residence will be a vacation home at the St. Regis resort, said the person, who asked not be named because the information is private.
Paulson is best known for making $15 billion betting against subprime mortgages as the 2007-2009 financial crisis hit. He considered relocating to eliminate taxes on his gains from money he has invested in his own hedge funds, four people who had spoken to him said in March 2013. He later said he decided against such a move “in light of the media attention.”
Puerto Rico, a self-governing territory, was ceded to the U.S. in 1898. It cannot file for bankruptcy protection as Detroit did in its historic filing in July.
Governor Alejandro Garcia Padilla, who took office in January 2013, has said he intends to repay bondholders on time and in full. Even so, the island’s Government Development Bank, which works on debt transactions, engaged restructuring specialists this year.
Bond Issue
The bank said this month it hired FTI Consulting Inc., based in West Palm Beach, Florida, to help Puerto Rico’s public corporations operate self-sufficiently. New York-based Cleary Gottlieb Steen & Hamilton LLP, which worked on Greece’s 2012 sovereign debt restructuring and represents Argentina in debt matters, was also hired, according to the bank.
Millstein & Co., based in New York, was hired prior to a $3.5 billion debt sale in March to help evaluate financing proposals and to analyze the territory’s capital structure. The bonds maturing in 2035 have slumped to an average 89.35 cents on the dollar on April 24 after being issued at 93 cents, data compiled by Bloomberg show.