Puerto Rico faces two options to resolve its crippling debt crisis, and both look extremely difficult as another payment deadline looms, one municipal bond expert said Friday.
"They have too much debt, and there's only two ways you get out of that: You have to grow your way out—their economy's not growing—or you have to restructure," said Peter Hayes, head of the municipal bonds group at BlackRock, in a CNBC "Power Lunch" interview.
The cash-strapped island faces a total debt tab of about $72 billion, and its Public Finance Corp. could miss a $58 million bondholder payment due Saturday. Puerto Rico needs to restructure its debt, but any efforts to scale down payments may prove "long" and "protracted," Hayes said.
The commonwealth likely needs to cut its obligations to about $40 billion, but getting bondholders to budge will be "difficult," he added. Hayes noted that officials would need to negotiate with various creditor groups, a method that has yet to yield results for power utility PREPA.
Puerto Rico Gov. Alejandro Garcia Padilla has previously called for debt restructuring.