Pauls' Revere
06-28-2015, 11:04 PM
http://www.bloomberg.com/news/articles/2015-06-29/puerto-rico-governor-says-debt-is-unpayable-as-deadlines-loom?cmpid=yhoo
With two days left in Puerto Rico’s fiscal year, the cash-strapped commonwealth is struggling to pass a budget that would allow it to make payments on a $72 billion debt load that the island’s governor said is unsustainable.
Governor Alejandro Garcia Padilla said investors should be prepared to sacrifice if they want the island’s economy to grow, the New York Times reported, citing an interview last week.
“The debt is not payable,” the governor told the Times. “There is no other option.”
Some Puerto Rican bonds are trading near record lows as the island of 3.5 million people grapples with a jobless rate double the national average and a debt load bigger than every U.S. state except California and New York. The governor’s remarks land in a jittery global debt market, as investors weigh the possibility of a Greek default and exit from the euro zone.
“There is no U.S. precedent for anything of this scale and scope, and there is the added complication of extensive pledging of specific revenue streams to specific debts,” they wrote. “But difficult or not, the projections are clear that the issue can no longer be avoided.”
The U.S. Congress should allow Puerto Rico entities to file for Chapter 9 bankruptcy protection, and an independent fiscal-oversight board could help improve the island’s finances, the authors wrote.
and now...Puerto Rico.
With two days left in Puerto Rico’s fiscal year, the cash-strapped commonwealth is struggling to pass a budget that would allow it to make payments on a $72 billion debt load that the island’s governor said is unsustainable.
Governor Alejandro Garcia Padilla said investors should be prepared to sacrifice if they want the island’s economy to grow, the New York Times reported, citing an interview last week.
“The debt is not payable,” the governor told the Times. “There is no other option.”
Some Puerto Rican bonds are trading near record lows as the island of 3.5 million people grapples with a jobless rate double the national average and a debt load bigger than every U.S. state except California and New York. The governor’s remarks land in a jittery global debt market, as investors weigh the possibility of a Greek default and exit from the euro zone.
“There is no U.S. precedent for anything of this scale and scope, and there is the added complication of extensive pledging of specific revenue streams to specific debts,” they wrote. “But difficult or not, the projections are clear that the issue can no longer be avoided.”
The U.S. Congress should allow Puerto Rico entities to file for Chapter 9 bankruptcy protection, and an independent fiscal-oversight board could help improve the island’s finances, the authors wrote.
and now...Puerto Rico.