S&P takes Puerto Rico off Credit Watch after $3.5 bln bond sale

NEW YORK, March 14 Fri Mar 14, 2014 1:08pm EDT

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NEW YORK, March 14 (Reuters) - Standard & Poor's Ratings Service took Puerto Rico off Credit Watch status on Friday, three days after the Caribbean island sold $3.5 billion of junk-rated bonds at a tax-free yield of nearly 9 percent.

In reaffirming its non-investment grade BB-plus rating on the island's general obligation debt, the U.S. credit agency said it was retained a negative outlook on the big borrower battling eight years of continuing recession and chronic budget deficits.

S&P said Tuesday's single-maturity bond sale, which was heavily oversubscribed, "will relieve near-term liquidity pressure on the commonwealth."

S&P had put the island on Credit Watch with negative implications earlier this year.