National Government As Puerto Rico Looks Headed for Possible Default, U.S. Says No to Bailout

Puerto Rico is experiencing a financial crisis that looks to impact the U.S.'s municipal bond market. The U.S. territory is $70 billion in debt while prospects of the mainland bailing it out appear slim to none.

With more government debt per capita than any state in the U.S., an unemployment rate of 14 percent, an ongoing "brain drain" of some of its most skilled leaving for better opportunities, Puerto Rico's troubles look to worsen still this year.

The caribbean island's top-ranking finance officials are warning that a government shutdown is "very probable" in the next three months. If a workable solution is not found soon, the financial crisis will have a "ripple effect" on the municipal bond market, financial expert Alexandra Lebenthal told CNBC on Monday.

Though some economists and finance experts in Puerto Rico have said that the Federal Reserve could bail out the island similar to how once-floundering bank giant AIG was bailed out during the 2007 financial crisis, the U.S. has so far made it clear that it intends to do nothing of the sort.

With no bailout on the horizon, possibilities include debt restructuring through more tough austerity measures—which has already been started by enacting a 11.5% sales tax and laying off government employees—to defaulting.