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Posted on 01/05/2016 4:20:57 PM PST by bkopto
The government of Puerto Rico has failed to make $37.3 million in debt repayments, a selective default dictated by lack of liquidity, Public Affairs Secretary Jesus Manuel Ortiz told EFE Tuesday.
The island's government signaled last week that it would not make the payments, which were due by midnight Monday.
The defaulted debt corresponds to $35.9 million in bonds issued by the Puerto Rico Infrastructure Finance Authority and $1.4 million in Public Finance Corp. bonds.
Rating agency Standard & Poor's said Monday that if Puerto Rico didn't pay the $37.3 million by midnight, the bonds would be declared in default.
S&P said that Puerto Rico's selective default on a "relatively small" amount reflected a "deliberate choice."
The bonds in question offer little legal protection to their holders.
The U.S. commonwealth, however, plans to make full payment of around $335 million on its constitutionally guaranteed general obligation, or GO, bonds, coming up with around half of the necessary cash by shifting around money that had originally been intended to pay holders of other bonds.
Gov. Alejandro Garcia Padilla said his administration had to prioritize among competing obligations and that incurring in a $37.3 million default allowed the government to pay public employees and issue income tax refunds.
Financial experts said that lawsuits from creditors can be expected in coming weeks.
Puerto Rico's financial liabilities total nearly $73 billion, a sum Garcia Padilla has declared "unpayable."
The governor's administration is appealing to the U.S. Congress to extend Chapter 9 bankruptcy protections to Puerto Rico.
We should start shelling Vieques Island again.
aaahh, the problem. pay the bank or pay the employees?
I move that we repay Puerto Rico’s debt under one condition- the island becomes independent.
Should give it back to Spain.
Not that we should have taken it in the first place.
Dominoes.
I got this, I got this...
Bush’s fault!
Time to get out of the coal mine; the Canary just died.
Oh I forgot - we have an AG Democrat who won't investigate Democrat criminals and thugs.
There was a time in French history when the little people had had enough. Our untouchable and criminal "ruling class" reminds me of the French aristocracy before their revolution. As I recall, it didn't end well for French "ruling class".
Is anyone really surprised?
That will solve absolutely nothing. We should sever all ties with PR. Let them be a completely independent nation with no political or financial ties to the United States.
At that point their debt problems will not have any effect on the American tax payer.
No, because in short order they will become another Cuba. Solution: Dismiss local government, put a military governor in place. Reopen Roosevelt Roads and Base Ramey. Cut taxes and welfare, give tax breaks to corporations for relocating to P.R. Promote tourism and gambling to lure travelers in larger numbers. Get after the drug crime rate hard. That will make a big difference.
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