Puerto Rico bonds pummeled by blocked bill

Due to the shortage of liquidity and the lack of access to traditional banking and bond markets, it is imperative to take the measures necessary to first close the budget and projected cash flow gap for the current FY, including implementing immediate measures to reduce expenses…. All these measures are key elements in this effort and delaying their approval puts at risk the financial stability of the government.
Investors were unimpressed by the legislature's reluctance to lift taxes, and sent the yield of the $3.5bn bond issued early last year – before debt markets slammed shut for the island – to a new high of 10.6 per cent, up 34 basis points on the day.

Puerto Rico's governor Alejandro Garcia Padilla was also unhappy, and said in a statement that legislators that voted against the bill put the future of the country at risk to further their personal agenda, according to Reuters.

The lawmakers who voted against the measure will have to answer to history for their irresponsible actions.
For more background to Puerto Rico's debt saga, read this big FT piece from January 2014



MarketsMunicipal bondsPuerto Rico
Puerto Rico bonds pummeled by blocked bill

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