The troublesome economic news for Puerto Rico will not stop. Following a report by Barron’s on the territory’s fiscal woes, several publications have jumped on the bandwagon, reporting on the $70 billion in debt, and the more than $30 billion unfunded pension liability, which according to experts, threatens future bond offerings.

Already the market has reacted harshly to the news, with reports coming in of a sell off of Puerto Rico bonds, with some reaching yields of 10%, a record high.

Despite the efforts of the administration of Governor Alejandro Garcia Padilla and Governor Luis Fortuño before him, it appears as if investors are not confident in the islands’ ability to fix its finances, especially when its unemployment remains in the double digits, and if it decreases it does so because of fewer people in the job market.

The dire fiscal scenario has some calling for the drastic step of seeking a bailout from Washington, DC, an unlikely proposition at best. Congress has never bailed out a city or territory and doing so would open the floodgates of troubled governments seeking aid from an already highly indebted federal government.

Reacting to the market sell off, the Government Development Bank of Puerto Rico announced that it would revise its plan offering of more bonds in the market, up to $1.2 billion in new debt, over the next year. The GDB said that comparisons with the city of Detroit were unfair, given the steps that the local government has taken to tackle the unfunded pension liability and government debt.

 

Reuters reports that as of Tuesday, a Janney analyst  saw no near term ratings cuts from the agencies despite investors fears. Credit downgrades would not only affect Puerto Rico’s general obligations bonds but also those of troubled agencies like the Puerto Rico Aqueduct and Sewer Authority and the Puerto Rico Electric Power Authority, which are already rated just one notch junk status. PREPA in particular is facing troubling news of its own, since the renewable energy projects that the agencies expect and mentioned as positive aspects, are now in jeopardy as the local government reconsiders them.

Contributing to the problematic scenario is a seemingly unstoppable exodus of Puerto Ricans to the states, a movement that hit home for the Garcia Padilla administration, when the kid actor in a new ad part of a campaign meant to attract investment to Puerto Rico, was reported to have moved with his family to Florida because of the poor economic situation in the US territory of 3.7 million Americans. On top of that, bankruptcies were reported to have increase 11% this month when compared to 2012.

This is year 7 of the economic recession that has plagued Puerto Rico since before the Great Recession hit the nation, and it shows no signs of relenting, although that doesn’t stop Garcia Padilla from claiming he saved Puerto Rico “from the cliff in which it was”.