Puerto Rico's governor says the island will default on its debt in January or May , adding that there is "no money to pay essential services and pay the creditors". This comes a day after a provision that would have granted the island access to Chapter 9 bankruptcy laws was left off the US omnibus spending bill. The incorporated Puerto Rico's territory is struggling to make payments on $ 72bn of debt, with $900m due on 1 January , which includes $350m that the Puerto Rican Government is constitutionally obligated to pay; the island only narrowly managed to make a 8.2bn payment on 1 December . Some analysts fear that a major default will result in a free-for-all among creditors, as they file a series of lawsuits seeking to protect their claims to the island's increasingly scarce cash. There was no Chapter 9 bankruptcy protection to create an orderly process for restructuring debt — a move opposed by some of the island’s creditors and by many congressional Republicans who compared it to a bailout. Furthermore, last week Puerto Rico's electricity provider, PREPA, bought itself more time to get insurers on board with a debt restructuring as it runs out of cash, however, last week the time is up and the utility may have to default on its $ $350m of debt if a deal is not reached
Puerto Rico's governor says the island will default on its debt in January or May , adding that there is "no money to pay essential services and pay the creditors". This comes a day after a provision that would have granted the island access to Chapter 9 bankruptcy laws was left off the US omnibus spending bill. The incorporated Puerto Rico's territory is struggling to make payments on $ 72bn of debt, with $900m due on 1 January , which includes $350m that the Puerto Rican Government is constitutionally obligated to pay; the island only narrowly managed to make a 8.2bn payment on 1 December . Some analysts fear that a major default will result in a free-for-all among creditors, as they file a series of lawsuits seeking to protect their claims to the island's increasingly scarce cash. Furthermore, last week Puerto Rico's electricity provider, PREPA, bought itself more time to get insurers on board with a debt restructuring as it runs out of cash, however, last week the time is up and the utility may have to default on its $ $350m of debt if a deal is not reached