Puerto Rico it is technically by default after failure to repay a bond from 58 million dollars. The small Caribbean state paid only $628 in interest, but it wasn't enough to prevent the rating agencies from declaring bankruptcy.
The $58 million payment was due on August 3, but since it was not a business day, the deadline was pushed back to Monday, August XNUMX. However, the government had already said that it would not have the necessary money.
The number one of the Government Development Bank, Melba Acosta Febo, specified that the decision not to pay the debt it was taken taking into account the "obligations towards creditors and the equally important obligations towards the population of Puerto Rico", which in the event of payment of the bond would have risked being denied essential public services.
Furthermore, according to Puerto Rico, the bonds in question involve less protection than normal ones and therefore a failure to repay does not mean default. But the rating agencies think very differently and immediately made it clear that for them it is bankruptcy.
Moody's has also issued a warning: what happened is only the tip of the iceberg, since "Puerto Rico does not have the resources to make future payments on the debt." Rating agency analyst Emily Raimes also believes "this is the first of several commonwealth debt defaults."
