Puerto Rico's $US70b default set to hit bond markets

June 29, 2015 5:22 AM

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The governor of Puerto Rico has decided that the island cannot pay back its more than $US70 billion in debt, setting up an unprecedented financial crisis that could rock the municipal bond market and lead to higher borrowing costs for governments across the United States.

Puerto Rico's move could roil financial markets already dealing with the turmoil of the renewed debt crisis in Greece. It also raises questions about the once-staid municipal bond market, which states and cities count on to pay upfront costs for public improvements such as roads, parks and hospitals...

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