The U.S. territory has managed to buy some time to stave off an economic crisis, but it may only be for a moment. As the island tries to pay off some
"Most people are very much in a watch-and-wait mode," said
One looming threat is the condition of the
Officials also announced that revenues from the government's sales and use tax for this past fiscal year rose 7 percent, though that was short of projections.
Those glimmers of good news followed an uproar on
"We stand behind the act and will defend it as a reasonable and necessary measure to protect the interests of all stakeholders of our public corporations," she said.
But ratings agencies punished Puerto Rican bonds with a flurry of downgrades.
While Garcia repeatedly reminded bondholders of his efforts to stabilize the economy and generate revenue, "all that stuff is secondary at this point," Tawil said. "This law — its potential power, its unknown use and its unknown legality — I think, carries a much heavier cloud over
It's only a matter of weeks before the financial future of the power company will be known — whether it will be the first to use the new law, said
"Something is going to happen there by middle of August," he said. "I think pretty much all the public corporations have severe liquidity problems."
Creditors are closely watching whether the government tries to reach substantial agreements with banks this month on how to handle upcoming payments, said
"They're going to be looking for some sign of progress, not just a temporary relief," he said.
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