Puerto Rico

Puerto Rico has declared a moratorium on payments on an additional Puerto Rico Infrastructure Finance Authority bond issue.

S&P Global Ratings said it lowered its issuer credit rating on the senior unsecured debt of the Government Development Bank for Puerto Rico (GDB) to D (default) from CC.

U.S. Treasury Secretary Jack Lew said concern for the people of Puerto Rico is the primary reason he wants lawmakers to adopt restructuring legislation for the commonwealth.

Puerto Rico’s legislature rejected the roll-out of a value added tax and approved a measure aimed at helping the Puerto Rico Aqueduct and Sewer Authority sell bonds.

Treasury Department secretary Jack Lew on Monday sent a letter to congressional leaders warning them that further inaction on a bill to help Puerto Rico pending in the House could lead to a taxpayer-funded bailout.

Puerto Rico imposed a moratorium on Government Development Bank principal payments Monday while also announcing two restructuring deals on the GDB debt.

As Puerto Rico faces bond defaults on Monday and July 1 without legislative relief from Congress, analysts say new litigation is increasingly likely.

Allies of Puerto Rico Gov. Alexandro García Padilla have turned against an already approved increase in a business-to-business tax and conversion to a value added tax.

A haircut of up to 47% is being negotiated between the Government Development Bank for Puerto Rico and holders of some of its debt.