Gov. Alejandro Garcia Padilla announced that Puerto Rico's government cannot afford to make the $370 million in bond payments due Monday after a failure to consolidate or find a political solution to the U.S. territory's spiraling public debt crisis.
Padilla's move on Sunday to suspend payments on debt owed by the island's Government Development Bank will likely prompt lawsuits from creditors and could be a prelude to a deadline to a much larger payment due July 1.
The Government Development Bank was $422 million in the hole Monday.
Puerto Rico will pay $22 million interest and it reached a deal Friday to restructure about $30 million, leaving it short $370 million.