Puerto Rico Said To Make July 1 Payment

Puerto Rico will make a July 1 payment of $645.2 million on its general-obligation debt, Reuters reported. The island also made a final payment of $265.5 million on a $900 million bank loan to a syndicate of banks on Tuesday, according to the report. But Puerto Rico's bond prices have been in free fall ever since Gov. Alejandro Garcia Padilla proposed a plan to seek a restructuring of the island's debt, suggesting that the island is virtually insolvent. The yield on the island's benchmark general-obligation bonds, which are backed by the full faith and credit of the commonwealth, rose to 13.028% on Tuesday from on 12.291% Monday, according to Electronic Municipal Market Access (EMMA). "Almost 10% of munis that traded Monday were Puerto Rico-related," Alan Schankel, head of municipal research at Janney, said in a note. In a TV address Monday night, Gov. Padilla announced he was establishing a group of senior officials to negotiate a debt moratorium with bondholders.