Tuesday January 12th, 2016 • Posted by Craig Eyermann at 6:47am PST • 1 Comment
The ongoing saga of Puerto Rico’s debt problems blew up a lot bigger last week, as the U.S. territory defaulted on an additional $174 million of debt payments to its creditors on January 4, 2016, exactly five months after Puerto Rico’s government defaulted on its debt for the first time ever since the territory become part of the U.S. in 1898. The New York Times reports:.........The default came just a little over two weeks after Puerto Rico’s government paid $120 million in bonuses to the employees of the territorial government. ........Now, Ambac, along with Assured Guaranty, are suing......Together, Ambac Financial and Assured Guaranty insure $2.6 billion of debt issued by the territory’s government entities whose bondholders Puerto Rico’s leaders have selected to be the first in line to take losses from the government’s default on its debt. All this action will play out in U.S. courts. This is what a sovereign debt default in the United States looks like.
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