Forecast came true

Puerto Rico will avoid default
3 july 2015

Puerto Rico has avoided a July 1 default -- for now.

Many had started referring to Puerto Rico as "America's Greece," but creditors are breathing a little easier now. Puerto Rico had several debt payments to make by Wednesday, and it has made them, according to government statements and spokesmen.

Puerto Rico paid back $645 million of general obligation bonds as well as $415 million for bonds associated with its troubled electric utility -- known as PREPA. It also managed to pay back a short-term bank loan of about $245 million.

While it's welcome news this week, Puerto Rico still has a huge debt load to repay in the coming months and years. Puerto Rican Gov. Alejandro García Padilla has dubbed the payments a "death spiral" and indicated it's too much to pay. The island is on the hook for over $70 billion.

Puerto Rico will avoid default

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