June 27 Standard and Poor's Ratings Services downgraded Puerto Rico Electric Power Authority's (PREPA) revenue bonds to "BB" from "BBB-minus", citing a new law that allows public corporations to restructure their debt.
The law, passed by the legislature on Wednesday, lays out a bankruptcy-like process for some public corporations.
"If PREPA is not able to renew the lines of credit or secure other liquidity, it may choose to restructure its debt, as allowed by the new law, which could increase bondholders' risk of not receiving full and timely payment," Standard & Poor's credit analyst Judith Waite. (bit.ly/1qOHIAD)
S&P's cut its rating on PREPA's revenue bonds to "BBB-minus" from "BBB" on June 18 and placed the rating on CreditWatch with negative implications. (Reporting By Kanika Sikka in Bangalore; Editing by Don Sebastian)