Puerto Rico Defaults on Debt Saturday August 1,2015

 

Puerto Rico has defaulted on debt by paying only a fraction of what was due on Saturday August 1,2015 showing the depth of the island's economic and cashflow problems and potentially opening the door to broader defaults and litigation from bondholders.

The US island territory paid only $628,000 of a $58m payment due on its Public Finance Corp (PFC) bonds, a subsidiary of the Puerto Rico's Government Development Bank (GDB).
"Due to the lack of appropriated funds for this fiscal year, the entirety of the PFC payment was not made today," GDB head Melba Acosta said

A decade-long economic stagnation has crippled the finances of the Caribbean island. Its economic troubles has forced many thousands to emigrate to the US mainland

Unemployment in Puerto Rico is running at 12.6 percent, more than twice that of the US

Governor Alejandro Garcia Padilla warned in July that the government’s $72bn debt was "not payable". Garcia has proposed restructuring the debt, a move that has been rejected by many bond holders.