Puerto Rico fails to transfer $94 million for a bond payment, which ‘puts other payments in jeopardy’
MEGAN DAVIES, REUTERS
BusinessInsider.com
Jul. 16, 2015
Puerto Rico’s Public Finance Corporation (PFC) failed to transfer funds to pay the principal and interest on its bonds, according to the island’s bank and a filing on Wednesday, highlighting cash problems as the island tries to restructure its debt.
The transfer of $93.7 million was for a debt service payment due Aug. 1 by PFC, part of the island’s Government Development Bank.
“I think this puts other bond payments in jeopardy,” said John Miller, co-head of fixed income for Nuveen Asset Management. “All classes of bonds, as the government has said, are in greater jeopardy of non-payment in the near term.”
Moody’s analyst Ted Hampton said he had not yet made a determination as to whether it constituted a default.
“Whether this missed payment by itself constitutes a default or not, it does show how pressures on Puerto Rico’s liquidity and budgetary process are intensifying,” Hampton said in an email.
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