Puerto Rico's governor says the commonwealth's debts are 'not payable'

The governor of Puerto Rico says the commonwealth is unable to pay $72 billion in debts, which could have a ripple effect for other local governments as investors become more cautious about lending.

"My administration is doing everything not to default," Alejandro Garcia Padilla said. "But we have to make the economy grow. If not, we will be in a death spiral." Puerto Rico has more municipal bond debt per capita than any American state, The New York Times reports, with bonds that have a face value of about eight times that of Detroit's bonds. Padilla said the government will likely ask creditors to make concessions, such as deferring some payments for five years or extending repayment time tables. "If they don't come to the table, it will be bad for them," Padilla said. "What will happen is that our economy will get into a worse situation and we'll have less money to pay them. They will be shooting themselves in the foot."

Padilla, who said he will not ask residents to pay more in taxes or cut pensions, will make a televised speech on Monday night, discussing the fiscal crisis.

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