Puerto Rico took the edge off this week’s debt default by announcing a tentative agreement with creditors of the island’s Government Development Bank, but that deal is far from a sure thing, according to a Bloomberg analysis yesterday.
Puerto Rico in Distress
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Officials in Washington, D.C., and San Juan have expected for some time that Puerto Rico would default yesterday on debt owed by its Government Development Bank. When it finally happened, the impact on the markets was muted, which means there may be less urgency to resolve a standoff in Congress over debt restructuring legislation, according to an analysis today on MorningConsult.com.
Gov. Alejandro García Padilla of Puerto Rico said yesterday that he had ordered a debt moratorium, blocking a $422 million payment due today, the New York Times reported.
In December, House Speaker Paul Ryan instructed lawmakers to find a “responsible solution” to Puerto Rico’s debt crisis in the first three months of this year, giving the island plenty of time to prepare for a May 1 deadline on a $422 million debt payment, The New York Times reported today.