Puerto Rico just went into default for the first time.  The commonwealth didn’t pay $58 million in debt due today to creditors of its Public Finance Corporation. The debt is mostly owned by ordinary Puerto Ricans through credit unions.  The island is struggling with about $70 billion in total outstanding debt, and its economy is in recession.
For 25 years, Puerto Rico has been caught in a debilitating economic spiral. Decades of recession and slow economic growth forced a succession of governments to take out loans to cover budget deficits.

“What we have been doing is basically borrowing to survive today,” Marxuach says. “Unfortunately, our debt levels have gotten to a point where the rating agencies have downgraded our credit to below investment grade.”

With a junk status rating, Puerto Rico is trying to negotiate a new bond sale with Wall Street investors.