New York Law

Felix-Salmon discusses why hedgies would rather Porta Rico's bonds were issued in New York than elsewhere.

So when you see hedge funds demanding that their new Puerto Rico bonds be issued under New York law, don’t kid yourself that they particularly value the protections that New York law gives them, or that they think that New York courts will allow them to recover most of their money in the event of default. Rather, they’re just hoping that Puerto Rico won’t bother defaulting on those bonds in the first place. And they might well be right about that.

It is more trouble (and expense) to default on these bonds than others.