Puerto Rico going down to the wire on $355M debt payment
The Government Development Bank for Puerto Rico announced it paid the full $355 million in principal and interest payments that were due Tuesday.
On the Municipal Bond Insurance Association’s third-quarter earnings call on November 5, CEO Joseph W. Brown said he expected the government to pay the December 1 debt obligation.
Puerto Rico’s debt-ridden government is walking a tightrope, trying to avoid default and, at the same time, avoid unpopular austerity measure that might further sink the island territory’s floundering economy.
Backers of proposals to allow Puerto Rico to restructure its debt through a bankruptcy process often used by US cities were to begin gathering in Washington, D.C. We have no cash left. Years of over-spending and the expiration of corporate tax incentives stuck it with debt that gets harder to pay as residents increasingly emigrate to the U.S.
Failure to make the payment would be an ominous turn for the territory.
Puerto Rico’s Government Development Bank has previously said it could run out of money by year’s end.
Blumenthal, a Democrat, spoke at the beginning of a hearing on Puerto Rico, which faces a debt payment Tuesday.
Puerto Rico Gov, Alejandro Javier Garcia Padilla testifies on Capitol Hill in Washington, Tuesday, Dec. 1, 2015, before the Senate Judiciary Committee hearing on Puerto Rico’s fiscal problems.
Puerto Rico has narrowly avoided a default by making a last minute payment on its outstanding debt.
Statehood supporters say the economic crisis shows why Puerto Rico must become the 51st USA state; independence proponents say it supports their cause.