Fitch says Puerto Rico's pension reform a positive step

April 8 Mon Apr 8, 2013 3:58pm EDT

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April 8 (Reuters) - Fitch Ratings said Puerto Rico's pension reforms is a positive step in reaching credit stability, although the commonwealth still faces several challenges such as a large structural budget gap that is unlikely to be resolved before fiscal 2015.

Fitch added that there would be no immediate impact on the island's rating, as it had already considered possible pension reforms when determining Puerto Rico's BBB-minus general obligation rating with a negative outlook.

Puerto Rico has been struggling with budget shortfalls for years. Fitch said it does expect the commonwealth's next fiscal budget to be balanced, but "the rating assumes substantial progress toward structural balance," the agency said in a statement.

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