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Puerto Rico Nears Next Big Default: A Look at the $2 Billion Due

  • The commonwealth owes $816 million for general obligations
  • Water and power utilities scramble to avoid July 1 default

Puerto Rico and its agencies are facing $2 billion of bond payments due Friday, and Governor Alejandro Garcia Padilla has said the U.S. territory simply doesn’t have the money.

It may mark the island’s biggest default yet and the first time it’s skipped payments on general-obligation bonds, which are given the top claim on the island’s funds. Such a lapse may spark legal battles with creditors if Congress doesn’t pass legislation that would keep litigation at bay while Puerto Rico tries to restructure its $70 billion of debt.