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Home / Expert Opinion / Money Management: Evaluating the value of a government’s ‘promise to pay’ and ‘full faith and credit’

Money Management: Evaluating the value of a government’s ‘promise to pay’ and ‘full faith and credit’

How did a promise to pay backed by the full faith and credit work out for Puerto Rico, the City of Detroit, Greece, Venezuela or Argentina? Historically, when cities or countries cannot pay their bills, investors get refinanced at 40% to 80% of their original investment. Put another way, they lose 20% to 60% of ...