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Puerto Rico financial crisis: Country on the brink of defaulting on $58 million of debts | |
(about 17 hours later) | |
Puerto Rico is expected to default on $58 million of debt on Monday. | Puerto Rico is expected to default on $58 million of debt on Monday. |
The US commonwealth country is increasingly coming under pressure financially as it attempts to restructure $72 billion of debt. | The US commonwealth country is increasingly coming under pressure financially as it attempts to restructure $72 billion of debt. |
Governor Garcia Padilla has described the country’s economy as being in a vicious “death spiral” and announced that the country is unable to pay back its debts. | Governor Garcia Padilla has described the country’s economy as being in a vicious “death spiral” and announced that the country is unable to pay back its debts. |
He said: “The debt is not payable. There is no other option. I would love to have an easier option. This is not politics, this is maths.” | He said: “The debt is not payable. There is no other option. I would love to have an easier option. This is not politics, this is maths.” |
Amid the country’s financial crisis, group of billionaire hedge fund managers have commissioned a report titled ‘For Puerto Rico, there is a better way’. It calls for Puerto Rico to sack teachers and close schools so that investors can recover some of the $72 billion in debt the country owes. | Amid the country’s financial crisis, group of billionaire hedge fund managers have commissioned a report titled ‘For Puerto Rico, there is a better way’. It calls for Puerto Rico to sack teachers and close schools so that investors can recover some of the $72 billion in debt the country owes. |
The country had initially agreed to make a loan repayment today, however a state spokesperson has since said that because it is a weekend, they can have until Monday to come up with the money. | The country had initially agreed to make a loan repayment today, however a state spokesperson has since said that because it is a weekend, they can have until Monday to come up with the money. |
However, it is universally understood that this will not be feasible and the world’s markets are bracing themselves for Puerto Rico to default on Monday. | However, it is universally understood that this will not be feasible and the world’s markets are bracing themselves for Puerto Rico to default on Monday. |
Puerto Rican analyst Ted Hampton told CNN: "We believe the probability of a default is probably approaching 100 per cent." | Puerto Rican analyst Ted Hampton told CNN: "We believe the probability of a default is probably approaching 100 per cent." |
Speaking to the Wall Street Journal this week, Nick Venditti, portfolio manager at Thornburg Investment Management which oversees debt, said: “I think it’s going to get incredibly messy.” | Speaking to the Wall Street Journal this week, Nick Venditti, portfolio manager at Thornburg Investment Management which oversees debt, said: “I think it’s going to get incredibly messy.” |