Puerto Rico Cut to B2 From Ba2 by Moody’s; Outlook Negative

The credit rating of Puerto Rico was cut three levels further into junk by Moody’s Investors Service as a law allowing some government entities to restructure debt outside bankruptcy failed to contain the U.S. commonwealth’s fiscal crisis.

The general-obligation rating went to B2 from Ba2, with the potential for further cuts, according to its release. The change affects $14.4 billion of debt. The New York ratings company also cut sales-tax debt, known as Cofina bonds, to speculative grade, leaving the commonwealth without an investment-grade credit.