We previewed this rather precarious situation twice in the last two weeks (see here and here), noting that this time is indeed "different." Why? Because unlike August when the island paid only $628,000 of a $58 million payment (so, just about 1%), a large portion of what's due Tuesday is GO debt guaranteed by the National Public Finance Guarantee Corp. A default on that spells litigation.

A default "would likely trigger legal action from creditors, commencing a potentially drawn-out process absent swift federal intervention," Moody's warned last month. 

As a refresher, here's a bullet point summary of recent developments from BofAML:

On 6 November, Puerto Rico released its unaudited quarterly financial and operating report. In the report, Puerto Rico makes plain that it faces a near-term liquidity crisis, has too much debt, limited ability to raise revenues, and a near-decade-long recessionary economy. As a result, it is our opinion that it will likely need to restructure its debt and, absent a voluntary restructuring, will prioritize essential government services at the expense of debt-service payments.

Moody's believes Puerto Rico is likely to default on at least a portion of its scheduled debt-service payments due 1 December, which include roughly $273mn of GDB debt guaranteed by the commonwealth.