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Wednesday, August 05, 2015

Puerto Rico Has Another Debt Worry on Horizon: Defaulting on Gen. Ob. Bonds

http://www.nytimes.com/2015/08/05/business/dealbook/puerto-rico-has-another-debt-worry-on-horizon.html?_r=0

After openly acknowledging on Monday afternoon that it had not made a $58 million bond payment, the government quietly disclosed in a financial filing later that afternoon that it had temporarily stopped making contributions of $92 million a month into a fund that is used to make payments on an additional $13 billion in bond debt. A small payment from the fund is due on Sept. 1. Unlike the bond payments that went into default on Monday, the ones coming due are on general obligation bonds -- the kind many investors have been led to believe would never go into default because the issuer's full faith, credit and taxing authority stand behind them.''

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