Puerto Rico’s population loss accelerated last year, a troubling sign for an island facing a severe fiscal crisis and a recession entering its 10th year, the Wall Street Journal reported today. The island’s governor said last week that the U.S. territory would make most of roughly $1 billion in debt payments due Jan. 1, largely as it borrows from reserve accounts. It will miss around $37 million in payments on two bonds today, and officials have warned of future defaults. The island’s bondholders and the insurance companies that have guaranteed those bonds say that Puerto Rico’s elected leaders have made the crisis worse by resisting deeper spending cuts and tax increases. The island’s local government has said there isn’t enough spending to cut or revenue to raise to plug budget deficits and, together with congressional Democrats and the Obama administration, they have called for Congress to create a mechanism for the island to restructure its debt. Read more. (Subscription required.)
The December episode of "Eye on Bankruptcy" 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.
