Debt Colony

By Dominic Rushe in The Guardian - Puerto Rico missed its first debt repayment on Monday, the first time the troubled US commonwealth has failed to pay its bills. The island paid just $628,000 toward a $58m debt due to creditors of its Public Finance Corporation. While the default was expected, it is likely to worsen the financial situation for the island as it struggles with debts estimated at $72bn. “This was a decision that reflects the serious concerns about the Commonwealth’s liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico,” the territory’s government development bank president, Melba Acosta Febo, said in a statement. Late last month Víctor Suárez, chief of staff for governor Alejandro García Padilla, warned that the government did not have the money for the $58m of principal and interest due on Public Finance Corporation bonds.