Tags: Puerto Rico | deficit | debt | bond

Puerto Rico Warns of $2 Billion Deficit If Forced to Pay Debts

Puerto Rico Warns of $2 Billion Deficit If Forced to Pay Debts

Tuesday, 20 December 2016 07:05 AM EST

Puerto Rico said it may run out of cash by February if it’s forced to cover bond payments, underscoring the pressure that’s causing the island to default on a growing share of its $70 billion debt.

The commonwealth projects that it will have a deficit of at least $2 billion in the year ending June 30 unless a debt-moratorium law is kept in place, according to a Dec. 18 report from the Government Development Bank. The law is scheduled to lapse on Jan. 31, after Governor-elect Ricardo Rossello is sworn in, though the governor can extend it by another two months.

Puerto Rico skipped about $1.5 billion of bond payments through September as Governor Alejandro Garcia Padilla conserved cash to keep the government running. The commonwealth is facing another round of large debt payments in February.

A federal board created to steady the island’s finances is working on approving a fiscal plan before those payments are due. Rossello will have to work with the seven-member board to find a way to restructure the government’s debt.

 

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StreetTalk
Puerto Rico said it may run out of cash by February if it's forced to cover bond payments, underscoring the pressure that's causing the island to default on a growing share of its $70 billion debt.
Puerto Rico, deficit, debt, bond
175
2016-05-20
Tuesday, 20 December 2016 07:05 AM
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