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Fitch cuts Puerto Rico credit rating to near-junk

Fitch cuts Puerto Rico credit rating to near-junk

Puerto Rico’s general-obligation credit grade was lowered by Fitch Ratings to one level above junk as the commonwealth’s budget gap has increased.
Fitch downgraded Puerto Rico, a self-governing U.S. commonwealth, to BBB- from BBB+, the ratings company said Wednesday. The outlook is negative.
Economic and revenue under-performance “has significantly increased the size of the operating imbalance for the current fiscal year and the gap presented to the commonwealth as it develops a budget for 2014,” Karen Krop, a Fitch analyst, wrote in a report.
“The current-year deficit is now projected to be well above the $1.1 billion originally forecast,” the report said. Moody’s Investors Service estimates the gap may be almost $2.2 billion.
Puerto Rico has $10.6 billion of general-obligation debt, according to Fitch. Puerto Rico bonds are tax-exempt in all U.S. states.
Standard & Poor’s and Moody’s also grade the commonwealth’s general-obligation bonds one step above junk with a negative outlook.
(Bloomberg)


Updated : 2020-12-01 06:58 GMT+08:00