Puerto Rico Seen Trying to Avert Defaults One Bond at a Time
- Commonwealth may use highway-bond revenue to repay GO debt
- `Considerable amounts' to be clawed back, Hanson says
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Puerto Rico may have to begin taking revenue that repays highway debt to help the struggling commonwealth pay for its general-obligation bonds as soon as this budget year, according to Height Securities.
The Caribbean island, which says it’s short $13 billion needed for bond payments in the next five years, must pay investors $1.1 billion this year on general-obligation debt guaranteed by its constitution. That pledge has been increasingly called into question. Standard & Poor’s dropped Puerto Rico’s rating to CC, the third-worst grade, saying in a report late Thursday that all of its tax-backed debt is highly vulnerable to default.