July 3 Moody's Investors Service cut its rating on the Puerto Rico Government Investment Trust Fund (PRGITF) to A-mf from Aaa-mf, citing higher risk of large and unorderly redemptions from the fund due to the commonwealth's fiscal challenges.
PRGITF is a collective investment trust sponsored by the Government Development Bank and the Secretary of the Treasury of Puerto Rico.
Puerto Rico, which recently passed a law allowing some of its public corporations to restructure their debt, has $70 billion in tax-free debt outstanding.
"The enactment of the law signals a depleted capacity for revenue increases and austerity measures, and a new preference for shifting fiscal pressures to creditors," Moody's said. (bit.ly/1kjePp9) (Reporting by Devika Krishna Kumar in Bangalore; Editing by Kirti Pandey)