Puerto Rico May Be Cut to Junk by Moody’s on Weak Economy
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Puerto Rico’s general-obligation debt, already graded one step above junk, may be cut by Moody’s Investors Service if the commonwealth’s finances continue to deteriorate and it isn’t able to access credit markets soon.
The decision affects $52 billion of rated debt, Moody’s said. Puerto Rico’s securities are held by more than three-quarters of mutual funds that invest in municipal bonds, according to Morningstar Inc. in Chicago. A rating cut may lead funds to sell some of those holdings.