Friday, August 7, 2020

Hernández Insists in Earmarking Funds to Pay GO Debt Interests

By on June 29, 2016

SAN JUAN—House Treasury Committee Chairman Rafael “Tatito” Hernández said he would fight the Senate to include enough funds in the fiscal 2017 budget to pay interests of general obligation (GO) debt backed by the Puerto Rico Constitution, which amounts to some $300 million.

Rafael Tito Hernandez House Treasury Committee

House Treasury Committee Chairman Rafael “Tatito” Hernández

The Senate wants to allocate said funds to the commonwealth’s retirement pension system, instead.

“The position by the majority and minority [delegations in the House] is to keep our word with the people and achieve balance with this crisis,” Hernández told reporters on Tuesday.

After failing to pay around $339 million in May, Puerto Rico has to pay some $2 billion on Friday July 1, out of which $780 million corresponds to GO debt. It is widely believed that the commonwealth will also default on the payment due this Friday.

Hernández said that the House was willing to find options to at least pay the interest of GO debt, which totals some $300 million. The Popular Democratic Party representative also noted that the budget package includes an additional $375 million that would allow the Government Development Bank to renegotiate its debt with various government agencies.

The committee chairman added that, while the House and Senate have so far disagreed on the best course of action, he is confident that both legislative chambers will find a compromise.

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