Puerto Rico officially in default

RobitTV

Puerto Rico just went into default for the first time in its history.

The commonwealth paid a mere $628,000 toward a $58 million debt bill due Monday to creditors of its Public Finance Corporation. This will hurt the island's residents, not Wall Street. The debt is mostly owned by ordinary Puerto Ricans through credit unions.

"This was a decision that reflects the serious concerns about the Commonwealth's liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico," Puerto Rico's Government Development Bank president Melba Acosta Febo said in a statement.

The default is a historic moment in Puerto Rico's economic "death spiral," a term the island's governor, Alejandro Garcia Padilla, has used. The island is struggling with about $70 billion in total outstanding debt, and its economy is in recession.

Padilla has put together a team to come up with a plan to restructure Puerto Rico's debt crisis by the end of the summer.

http://money.cnn.com/2015/08/03/investing/puerto-rico-default/

America's "Greece" :cool::cool:

Slydice

When I click on the link you posted, it says $58 million not $58 billion.

All other news articles in a google search say $58 million.

RobitTV

Slydice wrote: »

When I click on the link you posted, it says $58 million not $58 billion.

All other news articles in a google search say $58 million.

Oh i thought it was a mistake at first i couldn't believe it was just 58 million. :pac::pac:

washman3

RobitTV wrote: »

Oh i thought it was a mistake at first i couldn't believe it was just 58 million. :pac::pac:

Only €58 million..??
Ordinary Joe Soaps here who were election workers for Fianna Fail and became overnight property developers owed much more than that. But luckily, thanks to Government 'decisions' they were able to walk away scot-free handing the tab to the Irish taxpayer.

The amount in question is quite small, but it's anticipated to be the first of many obligations that Puerto Rico will be unable to honour.

The default has been expected for over a month, since Fitch placed PR in its "actual default" category, and the other ratings agencies categorised general PR debt as junk with a negative outlook.

The default is interesting for two reasons.
1. In terms of US municipal defaults, t will dwarf the Detroit default of 2013. Detroit went through an $18 bn bankruptcy with $7 bn debt forgiveness; Puerto Rico has a debt of $73 bn
2. Puerto Rico is a commonwealth, so it cannot avail of US Chapter 9 bankruptcy protection. That means extensive and costly legal disputes.

Difficult time ahead for Puerto Ricans in that case... but will make for an interesting chapter in the history of sovereign defaults. Well, it's an ill wind that blows no good.

K-9

washman3 wrote: »

Only €58 million..??
Ordinary Joe Soaps here who were election workers for Fianna Fail and became overnight property developers owed much more than that. But luckily, thanks to Government 'decisions' they were able to walk away scot-free handing the tab to the Irish taxpayer.

Mod:

Keep it on topic please, there are other threads for FF and developers etc.