We rate all Puerto Rico tax-backed debt at 'CC', except for Puerto Rico Public Finance Corp. (PFC) and Puerto Rico Infrastructure Financing Authority (PRIFA) federal rum excise tax-secured debt, which is currently in default and rated 'D'. We rate debt 'CC' when we expect default to be a virtual certainty, regardless of the anticipated time to default. In our view, all of Puerto Rico's tax-backed debt is highly vulnerable to nonpayment, which could take the form of either a missed debt service payment or a distressed exchange that we would characterize as a default.
U.S. PUBLIC FINANCE : TOPICS
The rating actions follow the announcement on May 1, that Puerto Rico's Governor Alejandro Garcia Padilla imposed a moratorium on the payment of all of Government Development Bank for Puerto Rico’s funded debt that is payable during the emergency period.
Puerto Rico’s legislature has enacted legislation giving Governor Padilla broad power to suspend debt service payments to holders of central government and public corporation debt. The governor has not announced when, or if, he will exercise these powers, and if exercised, how they would be applied.
Standard & Poor's Ratings Services today said that the Government Development Bank for Puerto Rico's (GDB) remittance of a relatively small $9.9 million interest payment on April 4, 2016, does not affect its rating or outlook on the Commonwealth of Puerto Rico' s general obligation (GO) bonds and GDB's bonds (both rated CC/Negative).
Standard & Poor's Ratings Services has affirmed its 'CC' rating on various issues of the Commonwealth of Puerto Rico's tax-backed debt not currently in default.
Standard & Poor's Ratings Services said today its 'CCC-' ratings on Puerto Rico Aqueduct & Sewer Authority's (PRASA or the authority) senior-lien revenue bonds and commonwealth-supported debt remain on CreditWatch with negative implications.
The Commonwealth of Puerto Rico has announced it will make payment for general obligation (GO) and other tax-backed debt service due Jan. 1.
The filing by Republican lawmakers of two bills in the U.S. Congress that could assist Puerto Rico during its current financial crisis does not result in a change to Standard & Poor's Ratings Services' credit rating or outlook (CC/Negative) due what we see as the uncertain chances for enactment of these bills.