Puerto Rico says will default on $779 million of senior debtSAN JUAN (Reuters) - Puerto Rico on Friday said it will default on $779 million worth of constitutionally backed debt, its most senior bonds, making good on threats that the island would choose paying essential services for its citizens over obligations to creditors. Debt payments totaling just over $2 billion were due on Friday. Governor Alejandro Garcia Padilla told reporters on Friday that overall the U.S. commonwealth territory will not pay $911 million worth of its obligations. The U.S. territory’s finances will soon come under a U.S. federal oversight board after U.S. President Barack Obama signed into law on Thursday a bill giving the island access to a debt restructuring process, and implementing a halt on litigation arising from any defaults on its $70 billion debt load. “Today, Puerto Rico is protected against creditors’ actions,” Garcia Padilla said. The General Obligation (GO) debt, or debt that carries a GO guarantee, is a category of debt that has not been defaulted upon by any U.S. state in decades. Puerto Rico is not covered by Chapter 9 U.S. bankruptcy code which applies to municipalities. Puerto Rico’s Government Development Bank (GDB) said on Friday the island would have just $95 million in cash at the end of the year even after the defaults announced on Friday. Puerto Rico’s benchmark 2035 GO bond rose 0.25 points in price to trade at 67.50 points, pushing the yield down to 12.519 percent. On Thursday Garcia Padilla authorized Puerto Rico, under a locally written debt moratorium law, to suspend some of the $2 billion in debt payments due on Friday. The developments on Friday represent the nadir of a decade-long effort by Puerto Rico to avoid economic collapse. The island is hamstrung by emigration and a 45 percent poverty rate.     “Even if the Commonwealth were to devote every last penny in the (accounts) to debt service on July 1, it would still owe holders of the public debt hundreds of millions of dollars,” the GDB said in a statement on Friday. Some of the debt expected to be defaulted upon such as PBA (Public Building Authority) ex-series L bonds will be mostly covered by reserve funds held by the trustee bank. Nearly all of the payments due on the Puerto Rico Infrastructure Financing Authority (PRIFA) Bond Anticipation Notes (BANs) will be covered by reserve funds as well.     If some of the debt is covered by insurance policies, some creditors could receive a portion of their payments.     The GDB, Puerto Rico’s primary fiscal agent, said the island has only $200 million in its operating account, and another $150 million in revenue that was redirected in recent months away from other debt payments.      Even if the island continues emergency measures like suspending vendor payments and withholding contributions to a pension fund that is already insolvent, the operating account will still run out of cash in 30 to 60 days, the GDB said. “We knew this day would come, that they would default, and it is here. It was a good thing they passed PROMESA, even at the eleventh hour,” Ted Hampton, senior credit officer at Moody’s Investors Service, said, referring to the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). Late on Thursday the island’s legislature approved an $8.9 billion fiscal 2017 budget, which now awaits Garcia Padilla’s signature. In the wee hours of Friday, Puerto Rico released long-awaited audited financial statements for fiscal year 2014, more than a year late.     The statements, audited by KPMG, showed, among other things, that Puerto Rico’s largest public pension has exhausted its assets and is now insolvent. Puerto Rico’s pensions have among the largest funding gaps in U.S. history. “When I entered office, Puerto Rico was property of Wall Street,” Garcia Padilla said, adding: “Today, everybody concludes that we have been telling the truth about Puerto Rico’s fiscal condition.” politicsNews
puerto rico says default million senior debts juan reuters puerto rico friday said default million worth constitutionally backed debt senior bonds making good threats island would choose paying essential services citizens obligations creditors debt payments totaling billion due friday governor alejandro garcia vanilla told reporters friday overall commonwealth territory pay million worth obligations the territory finances soon come federal oversight board president barack obama signed law thursday bill giving island access debt restructuring process implementing halt litigation arising defaults billion debt load today puerto rico protected creditors actions garcia vanilla said the general obligation go debt debt carries go guarantee category debt defaulted upon state decades puerto rico covered chapter bankruptcy code applies municipalities puerto rico government development bank db said friday island would million cash end year even defaults announced friday puerto rico benchmark go bond rose points price trade points pushing yield percent on thursday garcia vanilla authorized puerto rico locally written debt moratorium law suspend billion debt payments due friday the developments friday represent radio effort puerto rico avoid economic collapse the island hamstring emigration percent poverty rate even commonwealth devote every last penny accounts debt service july would still owe holders public debt hundreds millions dollars db said statement friday some debt expected defaulted upon pba public building authority l bonds mostly covered reserve funds held trustee bank nearly payments due puerto rico infrastructure financing authority prima bond anticipation notes bans covered reserve funds well if debt covered insurance policies creditors could receive portion payments the db puerto rico primary fiscal agent said island million operating account another million revenue redirected recent months away debt payments even island continues emergency measures like suspending vendor payments withholding contributions pension fund already insolvent operating account still run cash days db said we knew day would come would default it good thing passed process even eleventh hour ted hampton senior credit officer moody investors service said referring puerto rico oversight management economic stability act process late thursday island legislature approved billion fiscal budget awaits garcia vanilla signature in wee hours friday puerto rico released audited financial statements fiscal year year late the statements audited km showed among things puerto rico largest public pension exhausted assets insolvent puerto rico pensions among largest funding gaps history when i entered office puerto rico property wall street garcia vanilla said adding today everybody concludes telling truth puerto rico fiscal politicsnews
Your task is to classify the provided input as real or fake news. Label 0 is meant for fake news, Label 1 is for real news. TEXT: Puerto Rico says will default on $779 million of senior debtSAN JUAN (Reuters) - Puerto Rico on Friday said it will default on $779 million worth of constitutionally backed debt, its most senior bonds, making good on threats that the island would choose paying essential services for its citizens over obligations to creditors. Debt payments totaling just over $2 billion were due on Friday. Governor Alejandro Garcia Padilla told reporters on Friday that overall the U.S. commonwealth territory will not pay $911 million worth of its obligations. The U.S. territory’s finances will soon come under a U.S. federal oversight board after U.S. President Barack Obama signed into law on Thursday a bill giving the island access to a debt restructuring process, and implementing a halt on litigation arising from any defaults on its $70 billion debt load. “Today, Puerto Rico is protected against creditors’ actions,” Garcia Padilla said. The General Obligation (GO) debt, or debt that carries a GO guarantee, is a category of debt that has not been defaulted upon by any U.S. state in decades. Puerto Rico is not covered by Chapter 9 U.S. bankruptcy code which applies to municipalities. Puerto Rico’s Government Development Bank (GDB) said on Friday the island would have just $95 million in cash at the end of the year even after the defaults announced on Friday. Puerto Rico’s benchmark 2035 GO bond rose 0.25 points in price to trade at 67.50 points, pushing the yield down to 12.519 percent. On Thursday Garcia Padilla authorized Puerto Rico, under a locally written debt moratorium law, to suspend some of the $2 billion in debt payments due on Friday. The developments on Friday represent the nadir of a decade-long effort by Puerto Rico to avoid economic collapse. The island is hamstrung by emigration and a 45 percent poverty rate.     “Even if the Commonwealth were to devote every last penny in the (accounts) to debt service on July 1, it would still owe holders of the public debt hundreds of millions of dollars,” the GDB said in a statement on Friday. Some of the debt expected to be defaulted upon such as PBA (Public Building Authority) ex-series L bonds will be mostly covered by reserve funds held by the trustee bank. Nearly all of the payments due on the Puerto Rico Infrastructure Financing Authority (PRIFA) Bond Anticipation Notes (BANs) will be covered by reserve funds as well.     If some of the debt is covered by insurance policies, some creditors could receive a portion of their payments.     The GDB, Puerto Rico’s primary fiscal agent, said the island has only $200 million in its operating account, and another $150 million in revenue that was redirected in recent months away from other debt payments.      Even if the island continues emergency measures like suspending vendor payments and withholding contributions to a pension fund that is already insolvent, the operating account will still run out of cash in 30 to 60 days, the GDB said. “We knew this day would come, that they would default, and it is here. It was a good thing they passed PROMESA, even at the eleventh hour,” Ted Hampton, senior credit officer at Moody’s Investors Service, said, referring to the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). Late on Thursday the island’s legislature approved an $8.9 billion fiscal 2017 budget, which now awaits Garcia Padilla’s signature. In the wee hours of Friday, Puerto Rico released long-awaited audited financial statements for fiscal year 2014, more than a year late.     The statements, audited by KPMG, showed, among other things, that Puerto Rico’s largest public pension has exhausted its assets and is now insolvent. Puerto Rico’s pensions have among the largest funding gaps in U.S. history. “When I entered office, Puerto Rico was property of Wall Street,” Garcia Padilla said, adding: “Today, everybody concludes that we have been telling the truth about Puerto Rico’s fiscal condition.” politicsNews
Your task is to classify the provided input as real or fake news. Label 0 is meant for fake news, Label 1 is for real news. TEXT: puerto rico says default million senior debts juan reuters puerto rico friday said default million worth constitutionally backed debt senior bonds making good threats island would choose paying essential services citizens obligations creditors debt payments totaling billion due friday governor alejandro garcia vanilla told reporters friday overall commonwealth territory pay million worth obligations the territory finances soon come federal oversight board president barack obama signed law thursday bill giving island access debt restructuring process implementing halt litigation arising defaults billion debt load today puerto rico protected creditors actions garcia vanilla said the general obligation go debt debt carries go guarantee category debt defaulted upon state decades puerto rico covered chapter bankruptcy code applies municipalities puerto rico government development bank db said friday island would million cash end year even defaults announced friday puerto rico benchmark go bond rose points price trade points pushing yield percent on thursday garcia vanilla authorized puerto rico locally written debt moratorium law suspend billion debt payments due friday the developments friday represent radio effort puerto rico avoid economic collapse the island hamstring emigration percent poverty rate even commonwealth devote every last penny accounts debt service july would still owe holders public debt hundreds millions dollars db said statement friday some debt expected defaulted upon pba public building authority l bonds mostly covered reserve funds held trustee bank nearly payments due puerto rico infrastructure financing authority prima bond anticipation notes bans covered reserve funds well if debt covered insurance policies creditors could receive portion payments the db puerto rico primary fiscal agent said island million operating account another million revenue redirected recent months away debt payments even island continues emergency measures like suspending vendor payments withholding contributions pension fund already insolvent operating account still run cash days db said we knew day would come would default it good thing passed process even eleventh hour ted hampton senior credit officer moody investors service said referring puerto rico oversight management economic stability act process late thursday island legislature approved billion fiscal budget awaits garcia vanilla signature in wee hours friday puerto rico released audited financial statements fiscal year year late the statements audited km showed among things puerto rico largest public pension exhausted assets insolvent puerto rico pensions among largest funding gaps history when i entered office puerto rico property wall street garcia vanilla said adding today everybody concludes telling truth puerto rico fiscal politicsnews