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.
Puerto Rico in Distress
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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.
Puerto Rico plans to invoke a new law permitting the suspension of debt payments if the island fails to reach an agreement to defer $422 million in bond payments due May 1, Bloomberg News reported yesterday. The commonwealth, which is grappling with a $70 billion debt crisis, remains in talks with creditors, said Jesus Manuel Ortiz, a spokesman for Governor Alejandro Garcia Padilla.