Moody’s downgrades Puerto Rico PFC debt

Dec 22 Moody’s said on Tuesday it downgraded $1.09 billion of Puerto Rico’s Public Finance Corporation (PFC) debt to C from Ca, noting the “diminishing recovery prospects” for the securities given repeated missed payments and bondholders’ limited legal resource.

Puerto Rico in August defaulted for the first time, paying only $628,000 of a $58 million payment due on its PFC bonds.

“Widespread losses affecting all of the commonwealth’s debt still appear likely,” said Moody’s, adding that general obligation and certain other obligations with stronger legal foundations would “likely yield substantially higher principal and interest recovery”.

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