Puerto Rico, August 3, 2015 .- “The bondholders now have not received the full and timely payment of debt service maturing on August 1, the bonds issued by the Public Financing Corporation of Puerto Rico. Moody’s considers this event as ‘default’ “said Emily Raimes, the vice president of Moody’s Investors Service, cited by AFP.
1 August was the deadline for the payment of 58 million dollars that Puerto Rico had to deposit bonds for the Corporation for Public Financing (CFP), a state entity that has the right to issue bonds on behalf of the state and its agencies, but it depends on budget allocations to service debt on their bonds.
In practice, the PIC had until August 3 to make the payment, because the first day of the month was the Sabbath.
However, the coverage of the corresponding funds are not included in the approved budget on June 30.
Back in June, the governor of Puerto Rico, Alejandro Garcia Padilla acknowledged the debt of the island is “priceless” and to be drawn to the nation of the “death spiral” in which public finances are.
The total debt of Puerto Rico and its agencies, currently amounts to 72.000 million , or 102% of GDP.
The Puerto Rican government has been forced to apply numerous cuts in public spending, generating massive demonstrations by the poor economic conditions that crosses the island, known as ‘the Greece of the Caribbean’.
In this unstable situation that, being a Commonwealth adds, Puerto Rico can not bankruptcy because bankruptcy law is unconstitutional there. / ORODRÍGUEZ
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