[bliblah]

The problem lies in the fact that Puerto Rico (unlike States and other municipalities in the United States) is unable to declare bankruptcy due to being a commonwealth.

If they could then these financial institutions would be unable to raid the island's coffers.

[oh_sigh]

US states can't declare bankruptcy which seems the closest analog to what PR is

[occamrazor]

However aren’t US states also obliged to run a balanced budget?

[oh_sigh]

Okay, so PR isn't obliged to run a balanced budget, and they sold bonds that were beyond their ability to repay, and so the people asking for the bonds to be repaid are the bad guys here?