Puerto Rico on the Brink Owes Investors $5 Billion in Next Year

Puerto Rico faces $5.4 billion of bond payments over the next 12 months, showing the pressure on the Caribbean island as it moves closer toward defaulting on its debt.
Puerto Rico and its agencies are on the hook for $635 million in August, the largest monthly bill for the rest of 2015, JPMorgan Chase & Co. said in a July 17 report, citing data from Bloomberg and Standard & Poor’s. That includes a $36.3 million payment due Aug. 1 from the Public Finance Corp., which may not be made because the legislature failed to appropriate the funds.
The schedule illustrates the costs ahead for the cash-strapped commonwealth, where Governor Alejandro Garcia Padilla is pushing to restructure a $72 billion debt load he says the island can’t afford. The payments approach $1 billion in January and about $2 billion in July 2016, JPMorgan said. Puerto Rico has a $9.8 billion budget for the year through next June.
“If we use dollars to make debt payments, we may not have the cash to pay for government services,” Luis Cruz, the commonwealth’s budget director, told reporters Monday in San Juan. He said officials are looking at “all options” for honoring its obligations.
Puerto Rico is veering toward the largest restructuring ever in the $3.6 trillion municipal-debt market after years of borrowing to paper over budget shortfalls. The prospect has pushed down the price of commonwealth bonds amid speculation about how investors will fare. Officials are seeking to draw up a plan by the end of August.

 

Read More: Puerto Rico on the Brink Owes Investors $5 Billion in Next Year – Bloomberg Business