Puerto Rico defaults on $58M debt payment

SAN JUAN, Puerto Rico, Aug. 3 (UPI) -- Puerto Rico paid only $628,000 on a $58 million debt bill due Monday, putting the country into default for the first time.

The country's Government Development Bank was supposed to make the full payment on its Public Finance Corporation debt service, but failed to do so. Moody's said it considers the lack of payment a default, CNBC reported.

"Due to the lack of appropriated funds for this fiscal year the entirety of the PFC payment was not made today (the first business day after the Saturday deadline)," GDB President Melba Acosta-Febo said in a statement.

CNNMoney said the default will hurt Puerto Rican citizens -- who own most of the deb through credit unions -- more than Wall Street.

Puerto Rico has about $70 billion in outstanding debt and has been in a recession in recent years. The country owed multiple debt payments Saturday and it has more than double the unemployment rate of the United States.

Emily Raimes, vice president at Moody's Investors Service, issued a statement saying the company views the missed payments as a default.

"This event is consistent with our belief that Puerto Rico does not have the resources to make all of its forthcoming debt payments. This is a first in what we believe will be broad defaults on commonwealth debt," she said.