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 fate of Puerto Rico has become a political as well as fiscal issue. The incorporated US 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 $350m payment on 1 December. In an interview with Fox News, Rossello said he had been told by his counterparts at Washington DC that they were "trying to find money" for the island. 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, today the time is up and the utility may have to default on its $8.2bn 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 US 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 $350m payment on 1 December. In an interview with Fox News, Rossello said he had been told by his counterparts at Washington DC that they were "trying to find money" for the island. 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, today the time is up and the utility may have to default on its $8.2bn of debt if a deal is not reached