puerto rico girds for bad news on debt
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

Puerto Rico girds for bad news on debt

Arab Today, arab today

Arab Today, arab today Puerto Rico girds for bad news on debt

A general view of Old San Juan in Puerto Rico
San Juan - AFP

Puerto Rico's governor geared Monday to share some very bad news with the rest of the US commonwealth: it owes around $72 billion in debt and cannot pay.

Alejandro Garcia Padilla's admission in an interview with the New York Times rattled stock markets and knocked 10 percent off prices of Puerto Rican bonds.

"The debt is not payable," Garcia Padilla told the paper in comments reported on Sunday. "There is no other option. I would love to have an easier option. This is not politics, this is math."

Garcia Padilla and senior staff members told the publication last week during an interview that the island would likely seek concessions from its creditors, maybe all of them.

This, the Times reported, could include deferral of some debt payment for up to five years or a lengthened timetable for repayment.

Over the past decade, Puerto Rico's debt has doubled as investors grew increasingly worried that the government was running out of cash.

"We have to make the economy grow," Garcia Padilla told the Times. "If not, we will be in a death spiral."

As a commonwealth, the island cannot file for bankruptcy, meaning a default could take years to resolve, the Times said.
The paper added that Puerto Rico has more municipal bond debt per capita than any US state.

The economy has posted negative growth for eight years. Ratings agencies like Moody's classify Puerto Rican debt as junk bonds.

The financial problems of the Caribbean island, which has a population of only 3.6 million, have shaken the large market for US municipal bonds, especially in the wake of the US city of Detroit's declaration of bankruptcy in 2013.

Meanwhile, Greece is facing its own debt crisis and growing risk of a euro exit. The country announced early Monday that it will shut banks for a week and impose capital controls, pleading for calm after anxious citizens emptied cash machines.

The governor's grim assessment coincides with the release of a report by ex-officials of the International Monetary Fund and the World Bank that says Puerto Rico's debt load is unsustainable.

The economy is caught in a vicious cycle: weak public finances fuel investor wariness and low growth, and that in turn increases the budget deficit and debt, said the report, commissioned by the governor.

The report said Puerto Rico needs structural reforms like cutting civil servants' salaries and the costs of providing public services like electricity and transport. The local electric company alone is saddled with debt to the tune of nine billion dollars.

The report also recommended a restructuring of Puerto Rico's debt through a voluntary exchange of existing bonds for others that are longer term.

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

puerto rico girds for bad news on debt puerto rico girds for bad news on debt

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

puerto rico girds for bad news on debt puerto rico girds for bad news on debt

 



GMT 11:28 2017 Saturday ,15 April

President Al-Bashir's visit to Kuwait and Bahrain

GMT 07:51 2017 Sunday ,26 November

HRH Crown Prince condoles with Egyptian President

GMT 14:35 2018 Friday ,12 October

Bahrain's media history documentation hailed

GMT 11:45 2017 Friday ,29 December

10 bodies found in mass grave in Myanmar

GMT 08:44 2016 Monday ,19 December

Hopeless Afghan struggle to save boy sex slaves

GMT 15:15 2013 Friday ,05 July

I breathe freedom in Jordan

GMT 12:55 2016 Sunday ,18 December

Kerry in likely last visit with Saudi king

GMT 05:49 2017 Wednesday ,24 May

Indian police make arrests after mobs lynch 8

GMT 12:12 2017 Sunday ,19 February

More South Sudanese officials quit unity gov't

GMT 09:25 2017 Wednesday ,09 August

Ghada Abdel Raziq prefers exciting drama

GMT 15:03 2017 Saturday ,14 October

HM King congratulates French President
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday