Children play in a fountain in the Puerto Rican capital of San Juan. (Ricardo Mangual / CC BY 2.0)

Puerto Rico will default on $37 million in debt repayments on New Year’s Day, says Gov. Alejandro Padilla.

The Guardian reports:

The troubled commonwealth is at loggerheads with investors over plans to restructure $70bn in debts that have triggered a financial crisis on the island leading to mass migration, school closures and escalating unemployment and poverty.

The island began defaulting on payments in August and faces close to $1bn in interest payments in 2016. Padilla said Puerto Rico would pay $354m of its obligations but will default on $35.9m of Puerto Rico Infrastructure Financing Authority debt and $1.4m of Public Finance Corp bonds, Padilla said. He also warned that the island did not have the cash to pay $400m due in May in Government Development Bank bonds.

Padilla said the island’s government would do “all [it] can to avoid” the shutdown of vital government services.

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— Posted by Alexander Reed Kelly.

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