Puerto Rico Defaults on Debt Payment for First Time
Puerto Rico paid only a portion of its $58 million debt bill on Monday putting the country into default for the first time.
The country paid only $628,000 on the $58 million that was due.
Puerto Rico paid only $628,000 on a $58 million debt bill due Monday, putting the country into default for the first time.
The country’s Government Development Bank was supposed to make the full payment on its Public Finance Corporation debt service, but failed to do so. Moody’s said it considers the lack of payment a default, CNBC reported.
“Due to the lack of appropriated funds for this fiscal year the entirety of the PFC payment was not made today (the first business day after the Saturday deadline),” GDB President Melba Acosta-Febo said in a statement.
CNNMoney said the default will hurt Puerto Rican citizens — who own most of the deb through credit unions — more than Wall Street.
Puerto Rico has about $70 billion in outstanding debt and has been in a recession in recent years. The country owed multiple debt payments Saturday and it has more than double the unemployment rate of the United States.
Emily Raimes, vice president at Moody’s Investors Service, issued a statement saying the company views the missed payments as a default.
Democrats are hoping bankrupt Puerto Rico will become the 51st state.