Moody's Investor Service said yesterday that Puerto Rico is likely to default on at least some of its $355 million in debt payments due Dec. 1, citing growing liquidity pressures, Reuters reported. The U.S. commonwealth, facing around $70 billion in total debt, is struggling to breathe life into a stalled economy with a roughly 45 percent poverty rate. Moody's has rated Puerto Rico Caa3 negative, one of the lowest ratings possible, indicative of obligations of “a very high credit risk.” The ratings service said in a note yesterday that the island "continues to operate with extremely limited internal liquidity and no access to external sources of financing." The debt due on Dec. 1 was issued by Puerto Rico's Government Development Bank. About $273 million of it is so-called general obligation (GO) debt, which is considered the island's highest priority debt and protected by its constitution. The GDB has said that it will make the payment, but Moody's was skeptical, noting that Puerto Rico has another $330 million in GO debt due on Jan. 1. Read more.
For more news and analysis on Puerto Rico’s debt crisis, be sure to visit ABI’s “Puerto Rico in Distress” webpage.
