Puerto Rico says it will miss some Feb. 1 debt payments

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By Nick Brown

<span class="articleLocation”>Puerto Rico’s government said it will miss some
debt payments due on Wednesday, including another payment on
general obligation (GO) bonds backed by the U.S. territory’s
constitution.

In a statement on Wednesday, the Fiscal Agency and Financial
Advisory Authority (FAFAA) said the island will miss the GO debt
payment; payments owed at Puerto Rico’s public finance and
infrastructure agencies; and $279 million owed by its Government
Development Bank.

Puerto Rico has been defaulting on debt periodically for
more than a year, including on GO debt, and the missed payments
were expected.

FAFAA said Puerto Rico will make full payments due Wednesday
on so-called COFINA debt, which is backed by sales tax, as well
as payments owed by the island’s retirement system, water
authority, municipal finance authority and industrial
development agency.

Puerto Rico is facing $70 billion in total debt, and nearly
half its 3.5 million residents live in poverty. New Governor
Ricardo Rossello, sworn in on Jan. 2, on Sunday signed a law to
ensure the government continues to provide essential services.

Rossello has said paying debt is also crucial, and has
proposed a number of measures to reduce government spending to
free up cash for debt payments.

Still, the island likely cannot afford to pay its debt in
full, and is in talks with bondholders to restructure.



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