Puerto Rico faces a moment of truth today, as the island owes a $355 million payment — a possible default which could trigger lawsuits, further spook investors and undermine the island's efforts to climb out of $72 billion in debt, Reuters reported today. The payment on bonds issued by the U.S. commonwealth's financing arm, the Government Development Bank (GDB), are crucial as Puerto Rico tries to stretch its liquidity into 2016 to give itself more time to restructure debt. A default is seen as possible but not definite. Governor Alejandro Garcia Padilla wants to overhaul spending and restructure debt, but bondholders are resisting cuts to repayments, and restructuring discussions look to take months. Read more.
In related news, the Senate Judiciary Committee will hold a hearing at 10 a.m. ET today titled “Puerto Rico’s Fiscal Problems: Examining the Source and Exploring the Solution.” To view the hearing details, including the witness list, please click here.
