Puerto Rico Misses First Debt Payment as Default Risk Rises

15-Jul (Bloomberg) — Puerto Rico said one of its agencies failed to transfer funds to a trustee to cover an Aug. 1 debt payment because the legislature didn’t appropriate the funds when it passed the budget last month.

It’s unclear whether the Public Finance Corp. will make the $36.3 million principal and interest payment on bonds maturing that day. If it doesn’t, that would mark the first time Puerto Rico has defaulted on a debt payment and would come as the commonwealth seeks to negotiate with creditors to restructure $72 billion of obligations.

“In accordance with the terms of these bonds, the transfer was not made due to the non-appropriation of funds,” Melba Acosta, president of the commonwealth’s Government Development Bank, said in an e-mailed statement.

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