Puerto Rico narrowly avoided a multimillion-dollar default on Tuesday by announcing a last-minute bond payment while warning that a deepening financial crisis has forced the government to divert money slated for future debt payments to avoid a shutdown of basic services.
The announcement by Puerto Rico's Government Development Bank came as Gov. Alejandro Garcia Padilla testified at a hearing of the Senate Judiciary Committee that the island was facing a liquidity crunch.
"Let us be clear: We have no cash left," he said. "This is a distress call from a ship of 3.5 million American citizens that have been lost at sea."
Garcia signed an executive...