Puerto Rico Makes July 1 Bond Payments, Avoids Default

Latin AmericaReuters

Puerto Rico made payments of around $1 billion to creditors due on July 1, alleviating fears of an imminent default.

A spokesman for the commonwealth confirmed on Wednesday that Puerto Rico made a payment amounting to around $645 million on its general obligation bonds. Reuters reported on Tuesday, citing a source with knowledge of the transaction, that this payment would be made.

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Puerto Rico's power authority PREPA also made a payment of $415 million due July 1, the authority said. That payment was met with the help of a $128 million advance from bond insurers.

Puerto Rico's Governor Alejandro Garcia Padilla roiled markets earlier this week by asking for a payment moratorium after producing a report that suggested the U.S. territory's $72 billion debt load was unsustainable.

Puerto Rico's benchmark general obligation bonds that carry an 8 percent coupon traded up at an average price of 68.714 cents on the dollar on Wednesday compared to 66.316 cents on the dollar the day before.

(Reporting by Edward Krudy; Editing by Alan Crosby and Diane Craft)