Plunging Into 'Death Spiral': Puerto Rico Close to Default, Governor Says

Puerto Rico, an unincorporated US island territory in the Caribbean, cannot make payments on its multibillion public debt and is close to default, its governor admitted to the New York Times.

MOSCOW (Sputnik) — Gov. Alejandro Padilla said in an interview published Sunday that Puerto Rico was about to plunge into a "death spiral" and would probably ask concessions from its creditors.

"The debt is not payable," Padilla said. "But we have to make the economy grow… If not, we will be in a death spiral," he added.

Some of options under consideration are deferring debt payments for five years or extending repayments schedule, the outlet cited him as saying.

The territory’s debt is estimated at roughly $72 billion. If it defaults, the fallout may hit the US municipal bond market that US states rely on to pay for basic community services. In 2013, the bond market received a jolt with the default of Detroit, the largest city the state of Michigan.

Puerto Rico is expected to publish a report on its financial health on Monday that it commissioned from former experts of the World Bank and the International Monetary Fund.