SAN JUAN, Puerto Rico (AP) — Puerto Rico Governor Alejandro Garcia Padilla is urging his successor to demand that a federal control board overseeing government finances move immediately to restructure much of its nearly $70 billion in debt.
The outgoing governor tells Governor-elect Ricardo Rossello in a letter released Friday night that the commonwealth cannot afford to pay $3.5 billion in annual debt service.
He says Puerto Rico faces $3 billion in additional liabilities by 2018 after federal health care funding sources and pension system assets are depleted and warns that action is needed before a litigation stay against creditor lawsuits expires in February.
The board can restructure debt through a court-supervised bankruptcy process but board chairman Jose Carrion has said it will try to reach voluntary deals with creditors.
Rossello takes office on Jan. 2.