Puerto Rico on brink of debt default

*This has been like watching a train go off its rails in slow motion. The effect, though, will be felt by Puerto Ricans and its creditors at full force. VL

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Victor Suarez, chief of staff for Puerto Rico’s governor

By Eric Platt and Nicole Bullock, Financial Times

[tweet_dis]Puerto Rico defaulted on some of its debts this weekend after years of battling to stay current on its obligations[/tweet_dis], signalling the start of a long and contentious restructuring process for the US commonwealth’s $72bn debt pile.

The territory, which successfully scrambled to make a $169m payment on debts owed by the Government Development Bank on Friday, did not make a $58m payment on Public Finance Corporation bonds, according to Victor Suarez, chief of staff for Puerto Rico’s governor.

[pullquote]“We don’t have the money.” -Victor Suarez, chief of staff for Puerto Rico’s governor.[/pullquote]

“We don’t have the money,” he said on Friday, according to newswire reports. “The PFC payment will not be made this weekend.”

The missed payment will push Puerto Rico formally into default after the close of business on Monday said credit rating agency analysts. The PFC bonds are the first to fall into arrears, and a government “working group” is racing to come up with a plan to restructure the territory’s debts and overhaul its economy.

Click HERE to read the full story.

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[Photo by Jorge Quinteros/Flickr]

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Victor Suarez, chief of staff for Puerto Rico’s governor