Puerto Rico's governor Alejandro Garcia Padilla said yesterday that it is "very, very unlikely" there will be no default on debt due Jan. 1 and that the U.S. territory was evaluating which bonds are to be paid, Reuters reported yesterday. "Making a total payment will be (very unlikely)," Garcia Padilla said. "If a partial payment is to be done, which bonds should be paid? It is an evaluation that we are doing." Puerto Rico first defaulted on its debt in August and has warned that more defaults are coming. It has an upcoming debt payment of around $1 billion due Jan. 1. "It is very, very unlikely there is no default," Garcia Padilla said. Puerto Rico officials have given clear warnings of defaults. Garcia Padilla said earlier in December that the island "will default in January or in May," and Melba Acosta, president of the island's Government Development Bank was quoted in local media last Friday saying that the island is expected to default on a Jan. 1 payment on its Infrastructure Finance Authority (PRIFA) bonds. Read more.
The December episode of "Eye on Bankruptcy" last week was devoted to Puerto Rico, featuring remarks by Rep. Pedro Pierluisi, Judge Steven Rhodes and an analysis of the coming Supreme Court argument on whether the Recovery Act was pre-empted by the Bankruptcy Code.
Join experts in San Juan to discuss Puerto Rico's economic distress and other important cross-border insolvency topics at ABI's Caribbean Insolvency Symposium, Feb. 4-6, 2016. Click here to register!
For more news and analysis of Puerto Rico's debt crisis, be sure to visit ABI's "Puerto Rico in Distress" webpage.
