Puerto Rico Furloughs Ahead of Bond Payment, Lawmaker Says
Representative Rafael Hernandez, chairman of the House Treasury Committee in Puerto Rico, discusses the government's financial crisis at his office in San Juan.
Photographer: Bill Faries/BloombergTime is running out for Puerto Rico. The island’s government needs to start unpaid furloughs of its workers to make a July payment on its junk-rated bonds, the chairman of the House’s Treasury Committee said.
The Caribbean territory of 3.5 million people faces a $630 million payment on its general-obligation bonds on July 1, according to Sergio Marxuach, public-policy director at the Center for a New Economy in San Juan. To make that payment, the government will need to start furloughing public workers because the island’s constitution stipulates that revenue must first be used to repay general-obligation debt, Representative Rafael “Tatito” Hernandez said in an interview.