Puerto Rico has halted a $422m
(£289m) debt payment due on Monday May 02,2016 after talks to ease the US
territory's crisis ended without a deal.
Governor Alejandro Garcia Padilla said in a televised speech he had issued an executive order suspending payments.
He described it as a "painful decision", but had been warning since last year that the island's public debt of more than $70bn was unpayable.
The US Congress has tried without success to agree a solution.
"Let me be very clear, this was a painful decision," Mr Garcia said in a speech. "We would have preferred to have had a legal framework to restructure our debts in an orderly manner."
He acknowledged before the weekend that if the payment was not made, it was likely to spark legal action from creditors.
A further debt payment of $1.9bn is due in July
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