June 18 Standard & Poor's Ratings Services
lowered its rating on Puerto Rico Electric Power Authority's
(PREPA) power revenue bonds to "BBB-" from "BBB", citing a risk
that the Government Development Bank (GDB) may not provide
interim liquidity to the authority.
"(There is a) risk that the GDB will not provide interim
liquidity if PREPA does not renew its lines of credit, which it
uses to purchase oil," Standard & Poor's credit analyst Judith
Waite said. (bit.ly/1nPxDQJ)
The GDB could have to provide liquidity if the cash-strapped
authority is unable to extend or replace its maturing lines of
PREPA has $8.6 billion of power revenue bonds outstanding,
S&P also placed the authority's rating on CreditWatch with
negative implications, pending the outcome of its negotiations
with banks with which it has outstanding lines of credit.
Fitch Ratings last week downgraded its rating on the
authority to "BB" from "BB-plus".
(Reporting By Kanika Sikka in Bangalore)