NEW YORK (TheStreet) -- Shares of Popular Inc. (BPOP) are falling by 3.99% to $28.42 on heavy volume in mid-morning trading on Tuesday, as the San Juan-based bank and financial services company takes a hit as Puerto Rico says it cannot pay its $72 billion debt.
Speaking during a TV address on Monday the governor of the U.S. common wealth, Alejandro Garcia Padilla, said his government's attempts at cutting expenditures and restructuring its debts have failed, USA Today reports.
The governor noted that former World Bank and International Monetary Fund officials have expressed their beliefs that further initiatives would not alleviate the debt pressure.
"Our public debt is unpayable," Padilla said, according to USA Today. "The report states even if we increased taxes and cut back spending, the magnitude of the problem is such, because of the weight of the debt we carry, that it would solve nothing."
So far today, 2.74 million shares of Popular have exchanged hands as compared to its average daily volume of 824,000 shares.
Separately, TheStreet Ratings team rates POPULAR INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate POPULAR INC (BPOP) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself."