SAN FRANCISCO Dec 14 A day after downgrading
Puerto Rico, Moody's Investors Service downgraded on Friday $599
million in rated outstanding University of Puerto Rico bonds by
two notches to speculative grade ratings, citing
"extraordinarily high reliance on the commonwealth for operating
Moody's also said in a statement that its downgrade also
reflects the university's dependence on Puerto Rico's Government
Development Bank for operating lines for liquidity.
The ratings agency added that university "has limited
ability to grow revenue, given resistance to raising tuition as
well as economic challenges that limit families' ability to pay
Moody's downgraded the University of Puerto Rico's
University System Revenue Bonds and Pledged Revenue Bonds to
'Ba1' from 'Baa2' and Educational Facilities Revenue Bonds, 2000
Series A issued through AFICA to 'Ba2' from 'Baa3.' The ratings
remain under review for further possible downgrade.
Moody's on Thursday cut Puerto Rico's credit rating by two
notches to 'Baa3,' just slightly above non-investment grade,
with a negative outlook.
The decision affects $38 billion of outstanding debt and is
linked to the U.S. commonwealth's weak economic outlook and to
the lack of meaningful pension reforms, the ratings agency said.