Puerto Rico governor declares emergency at Government Development Bank

Puerto Rico governor declares emergency at Government Development Bank - The Washington Post
"SAN JUAN, Puerto Rico — Gov. Alejandro García Padilla ­announced Saturday that he has declared a state of emergency at the Government Development Bank, a moved aimed at ensuring that Puerto Ricans continue to receive essential government services.
The governor said he issued an executive order Friday to halt the erosion of the bank’s dwindling liquidity by allowing withdrawals only to fund necessary costs for health, public safety and education services.
The order does not call for a moratorium on the bank’s principal or interest payments.
García said the government bank, known as GDB, is in talks with creditors regarding a payment of nearly $423 million, due in May.
The order is the first taken under the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act enacted this past week, which gives the governor emergency powers to deal with the fiscal crisis, including the ability to declare a moratorium on all bond payments.
“The GDB’s financial condition has continued to deteriorate and, absent the measures ordered in this executive order, there is an imminent risk of a drastic decrease in GDB’s liquidity in the immediate term.
This, in turn, would jeopardize the provision of essential services by the commonwealth,” the order states..."