Above: San Juan (CJ Photo)

By the Caribbean Journal staff

Puerto Rico Governor Alejandro Garcia Padilla has signed legislation authorizing the issuance of new general obligation bonds.

The bonds will be used to “refinance outstanding lines of credit and meet the needs of government liquidity” for the debt-riddled island.

The authorization means that as much as $3.5 billion in bonds could be sold in the issue.

The bonds, which are the first issued by the government of Puerto Rico since Padilla took office in 2013, are primarily aimed at the “repayment of credit lines” granted by the Puerto Rico Government Development Bank and the refinancing of the soon-to-expire outstanding debt, the Governor said.

“This administration continues to take the necessary steps so that Puerto Rico can strengthen its fiscal position and establish the bases for a sustainable economic growth,” the Governor said in a statement. “I am confident that the success of this issue, along with budget adjustments and strategies to promote employment and industrial production, will put us on track to take the country forward.”

Puerto Rico has been in a severe economic situation for several years; last month, two New York-based ratings agencies, Moody’s and Standard and Poor’s, downgraded the island’s general obligation bonds to “junk status.”