{"id":14597,"date":"2015-11-20T16:32:07","date_gmt":"2015-11-20T21:32:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14597"},"modified":"2015-11-20T16:32:07","modified_gmt":"2015-11-20T21:32:07","slug":"puerto-rico-faces-public-unrest-as-cash-crunch-may-leave-government-workers-unpaid","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14597","title":{"rendered":"Puerto Rico Faces “Public Unrest” As Cash Crunch May Leave Government Workers Unpaid"},"content":{"rendered":"

Puerto Rico Faces “Public Unrest” As Cash Crunch May Leave Government Workers Unpaid<\/a><\/h3>\n

Heavily indebted Puerto Rico was due to meet with representatives of its creditors on Friday in a desperate attempt to forge ahead with a plan to restructure some $72 billion in debt. No offer is expected to be made at the meetings in New York, but the commonwealth\u2019s Government Development Bank says it hopes to provide creditors\u2019 advisors with greater clarity on “the proposed restructuring process,\u201d which GDB says \u201cis a comprehensive plan that will benefit all parties while supporting the creation of a sustainable path forward.\u201d<\/p>\n

As\u00a0Reuters notes<\/a>, \u201ccreditors have been resistant to cuts to their repayment, insisting that Governor Alejandro Garcia Padilla’s administration do more to curb spending, boost government efficiency and promote economic growth.\u201d<\/p>\n

The GDB is facing a $354 million principal and interest payment on December 1 –\u00a0some $270 million of that is GO debt guaranteed by the National Public Finance Guarantee Corp<\/strong>. Defaulting on that is bad news and as Moody\u2019s warned earlier this month, a missed payment on the commonwealth\u2019s highest priority obligations\u00a0\u201cwould likely trigger legal action from creditors, commencing a potentially drawn-out process absent swift federal intervention.\u201d\u00a0<\/strong><\/p>\n

Another $303 million comes due one month later on January 1.<\/p>\n

GDB called Friday\u2019s meeting with consultants and advisers \u201cpart of our continued effort to maintain a constructive and open dialog with our key stakeholders” while a spokesperson for the governor promised Puerto Rico is doing everything in its power to make the December 1 payment although Padilla has repeatedly made clear that if it comes down to defaulting or cutting off services to the people, bondholders will be out of luck.<\/p>\n

Here’s a bullet point summary of recent developments from BofAML:<\/p>\n