Puerto Rico expects to have the money needed to make a January payment due on its general-obligation bonds, a government official said.
Victor Suarez, the chief of staff for Governor Alejandro Garcia Padilla, told reporters Monday in San Juan that the island will pay its debt bills as long as it has adequate funds to do so. He said the commonwealth is working to boost its cash on hand and borrowed $400 million from some government funds last week.
“We anticipate we will have the cash flow to make the January payment,” Suarez said.
The comments come a week after Puerto Rico defaulted for the first time, when it paid only $628,000 of a $58 million interest and principal bill on bonds sold by its Public Finance Corp. Puerto Rico’s securities have tumbled in price after Garcia Padilla said the U.S. territory can’t afford its $72 billion of debt because of the teetering economy.
Last week, Puerto Rico disclosed that it has temporarily suspended monthly payments into the fund that covers its general-obligation bond payments.
Garcia Padilla said in June that the commonwealth was unable to repay all of its obligations, and officials have said they aim to draft a restructuring plan by Sept. 1.
Puerto Rico’s debt crisis has been building for years as the commonwealth borrowed to cover budget gaps. The administration has delayed tax rebates and payments to suppliers to preserve money for health and safety programs for its residents.
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