U.S. PUBLIC FINANCE : TOPICS
Puerto Rico's ongoing fiscal struggles could continue to have negative implications for rated colleges and universities in the commonwealth in the coming year as it has in the past, Standard & Poor's Ratings Services believes.
Puerto Rico's ongoing fiscal struggles could have negative credit implications for some health care providers on the island.
Standard & Poor's Ratings Services assigned its 'CCC-' rating to Puerto Rico Aqueduct & Sewer Authority (PRASA)'s series 2015A senior-lien revenue bonds. We placed the rating and the 'CCC-' rating on PRASA's existing senior-lien revenue debt on CreditWatch with negative implications.
Standard & Poor's Ratings Services has lowered its rating on $1.0 billion of Puerto Rico Public Finance Corporation (PFC) series 2011A, 2011B, and 2012A bonds to 'D' from 'CC' following a payment default on the bonds as of the close of business Aug. 3, 2015, the first business day following the Aug. 1 stated due date, which fell on a Saturday.
Standard & Poor's Ratings Services has lowered its 'CCC-' rating on Puerto Rico Public Finance Corp. (PFC) series 2011A and B and series 2012 A bonds to 'CC' following non-appropriation of debt service by the legislature in the fiscal 2016 budget. We see default for this debt on its next debt service date, Aug. 1, 2015, as a virtual certainty.
This downgrade reflects our view that a default by Government Development Bank for Puerto Rico (GDB) in the near term is a virtual certainty. GDB has announced its intent to purchase its outstanding senior notes in the open market and in privately negotiated transactions through cash or exchange with new securities at a price the bank expects to be "materially less than par."
We believe the recently updated disclosure statement confirms the precarious nature of Puerto Rico's liquidity, as well as the worsening credit fundamentals that have led the governor to ask for voluntary restructuring negotiations with all debt holders.
Standard & Poor's Ratings Services has lowered its general obligation (GO) rating on the Commonwealth of Puerto Rico to 'CCC-' from 'CCC+'. At the same time, Standard & Poor's has removed the GO rating from CreditWatch, where it was placed with negative implications on April 24, 2015, and assigned a negative outlook.
For the 10th quarter in a row, U.S. public finance (USPF) ratings achieved more upgrades than downgrades in the first quarter of 2015. It was also the fifth consecutive quarter in which upgrades outpaced downgrades among both nonhousing and housing ratings.