The Puerto Rico Infrastructure Financing Authority (PRIFA) failed to transfer funds to its bond trustee for debts due on Jan. 1.

The U.S. territory confirmed defaulting on certain bonds on Jan. 5.

As Latin Post reported, Puerto Rico announced that it intended to begin paying off principal and interest payments on its massive public debt on the first day of January.

The debt was postponed until Jan. 4. On Tuesday, the trustee for PRIFA's series 2005 B and 2006 bonds said they had not received sufficient funds for the payment of certain debts. Furthermore, a Series A bonds' trustee said in a separate filing that funds did not come in. The trustee for its series 2005 C bonds also revealed that they it did not get funds from PRIFA to pay off their debt service.

The Financial Guaranty Insurance Company (FGIC) will now pay holders of certain Series A and C bonds.

Due to the nonpayment, Puerto Rico faces possible litigation from creditors.

As previously reported, the commonwealth is preparing for lawsuits that may come. Puerto Rico Gov. Alejandro García Padilla is concerned that having to deal with the legal aspects of defaulting may make it more difficult to pay off creditors. "Every dollar used to pay lawyers will be a dollar ... not available to pay creditors," he said.

U.S. lawmakers are currently considering ways to alleviate Puerto Rico’s debt crisis through emergency bankruptcy policies.

As the Wall Street Journal reports, Puerto Rican business owners remain faithful that business on the island is healthy. According to Robert Taubman, the chief executive of a mall-owning company that invested $475 million to build the Mall of San Juan, the island's market is performing vigorously.

“San Juan is one of the densest markets in North America,” he said, “We are extremely bullish.”