“A Mystery Inside An Enigma” How The Government Plans To Pay Debt
SAN JUAN – Economist Gustavo Velez urged the government Saturday to explain publicly how it plans to pay some $2 billion it owes throughout 2016.
Puerto Rico is slated to pay the bulk of about $902 million in payments due this week, including some $330 million in general obligation payments. However, governor Alejandro Garcia Padilla opted to default on $35.9 million due to the Infrastructure Financing Authority and on $1.4 million due to the Public Finance Corp.
Padilla said about $163 million of the GO payment came from clawing back revenues from several agencies, following an executive order that granted the commonwealth power to take revenues from several agencies to keep payments on GO debt current.
The commonwealth, however, still has over $2 billion in payments due from February until July 2015.
A breakdown of the debt payments shows that the Commonwealth will have to pay $402 million in February; $ 29.3 million in March; $40.9 million in April; $469.4 million in May; $ 71.3 million in June and $1.9 billion in July 2016. In July, specifically, the government must pay $779 million in general obligations.
The government must pay significant amounts in 2016, including a $318.3 million payment by COFINA due in February. The Puerto Rico Electric Power Authority must pay $423.8 million this year; the Aqueduct and Sewer Authority $147.5 million; the Public Buildings Authority $177.2 million and the Highway and Transportation Authority $232.5 million.
“What is not clear is how the government will pay the other bond maturities that will occur in 2016,” Velez said in a radio interview about payments to bondholders due this year.
The Economist stressed that the government should say how it plans to make payments while providing government services.
“We have been 10 years in an economic depression and that adds to the level of complexity of Puerto Rico,” he said.
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