Puerto Rico Debt-Crisis Grows as Payments Halt, Agency Defaults
ByPuerto Rico’s debt crisis escalated as it suspended deposits into a fund that pays its general-obligation bonds and one of its agencies defaulted for the first time, jeopardizing the cash-strapped government’s ability to raise money.
The events underscore the risk to investors as the island is pushed to the brink from years of borrowing to cover budget deficits. Governor Alejandro Garcia Padilla is seeking to restructure Puerto Rico’s $72 billion of debt, saying bondholders need to share in the commonwealth’s sacrifices.
Struggling to conserve cash, Puerto Rico temporarily halted monthly transfers into a fund that pays down $13 billion of general-obligation debt, it said in a regulatory filing late Monday. That came after its Public Finance Corp. made only $628,000 of a $58 million debt-service payment because the legislature didn’t appropriate enough money…
Puerto Rico Debt-Crisis Grows as Payments Halt, Agency Defaults
