Puerto Rico says it will default

(Business Insider) Puerto Rico is going to default. In a television address made Sunday, Puerto Rican Gov. Alejandro Garcia Padilla said the island’s Government Development Bank would not make a $422 million payment due to its creditors by the end of business on Monday, according to Bloomberg.

A Reuters report ahead of Padilla’s address released Sunday evening said the GDB was “expected to skip at least the principal portion of its payment to hedge funds, credit unions, and other bondholders.”Like many financially distressed governments around the globe — think Greece, for example — Puerto Rico has been faced with demands from creditors and their consultants that the island undertake drastic spending cuts to create surpluses large enough to meet debt obligations.

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