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Trump's budget director squelches talk of eliminating Puerto Rico's debt

President Trump's budget chief said that the U.S. will not offer Puerto Rico a bailout package amid its financial crisis after Hurricane Maria, Bloomberg News reported.

Mick Mulvaney, director of the Office of Management and Budget in the White House, said that President Donald Trump's comments on Puerto Rico's debt being wiped out were about figuring out a way to solve its debt problem.

President Trump earlier hinted at erasing the island's debt.

"We have to look at their whole debt structure," Trump said recently. "They owe a lot of money to your friends on Wall Street. We're going to have to wipe that out. That's going to have to be — you know, you can say goodbye to that."

Trump's statement saw benchmark general-obligation bonds due in 2035 diving 12%. The bond prices, however, later bounced back.

Puerto Rico is laboring under long-standing debt issues, with current obligations standing at $74 billion. Apart from California, New York and Massachusetts, Puerto Rico has more debt than any U.S. state.

Moody's also has said that the hurricane damage will weigh on the island's credit quality.

Puerto Rico's Governor Ricardo Rossello downplayed Trump's comments suggesting the unincorporated U.S. territory was dealing with the debt issue through bankruptcy process.

"As far as the comments made about wiping the debt clean, that is the opinion of the president. Puerto Rico is already involved on a judicial front," Rossello said.