As Puerto Rico runs out of cash and approaches a Jan. 1 due date for about $1 billion in debt payments, investors increasingly are uneasy about the fate of bonds sold with a near guarantee, the Wall Street Journal reported today. The bonds, backed by sales taxes and known by the Spanish acronym Cofina, were issued starting a decade ago to plug budget gaps and repay other lenders.
Puerto Rico in Distress
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Puerto Rico’s beleaguered electric utility announced new progress late Wednesday in its continuing efforts to avoid a default on as much as one-eighth of the island’s total debt of $72 billion, the New York Times reported today.
Puerto Rico's governor Alejandro Garcia Padilla said yesterday that it is "very, very unlikely" there will be no default on debt due Jan. 1 and that the U.S. territory was evaluating which bonds are to be paid, Reuters reported yesterday. "Making a total payment will be (very unlikely)," Garcia Padilla said. "If a partial payment is to be done, which bonds should be paid?
Puerto Rico Governor Alejandro Garcia Padilla will pay Christmas bonuses due to public employees as the commonwealth contemplates defaulting on bond payments at the start of the year, Bloomberg News reported yesterday. The governor, who won’t seek re-election when his term expires in January 2017, will begin paying about $120 million that workers were owed as of Dec.
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The Financial Oversight and Management Board for Puerto Rico was created under the Puerto Rico Oversight, Management and Economic Stability Act of 2016. The Board consists of seven members appointed by the President of the United States and one ex officio member designated by the Governor of Puerto Rico. Access information on the Board, documents, videos of meetings, calendar of events and live webcasts by clicking here.