Puerto Rico raised infrastructure (toll roads) revenues by borrowing money from bondholders, coordinated by our old friend, Goldman Sachs. Puerto Rico agreed to pay Goldman a set interest rate over a defined period. The debt and interest piled up as Puerto Rico could not pay back Goldman by the end of the finance period.
So, Goldman enabled this debt issuance on tollway now slipping through Puerto Rico's grip, and who is there to pick up the pieces and provide a 40-year solution but the very same Goldman:
the government will receive an up-front payment of $1.08 billion from Goldman Sachs Global Infrastructure Partners II LP and Abertis Infraestructuras, based in Spain. The commonwealth will retain ownership of Route 22, a toll road that runs for 52 miles through the north side of the island, and Route 5, a four-mile toll road that connects to Route 22 and runs south of San Juan.
At least 90% of the up-front payment will be used to pay down outstanding Puerto Rico Highways and Transportation Authority debt, said David Alvarez, executive director of the Puerto Rico Public-Private Partnership Authority. The highways authority has roughly $7 billion of outstanding bonds.
Goldman helped Puerto Rico get into the mess that Goldman is now offering to clean up for a piece of the tolling cash cow. It's privatization. It's a racket.
Let's hope that Goldman Sachs is not running a similar kind of racket on Nashville in financing the Music City Center construction. Will they be bailing Metro out some day in exchange for decades of control? Did Nashville necessarily have to bed down with the banking-class mafia just because everyone else seems to be?