SAN JUAN Jan 28 Puerto Rico finance officials
trying to avoid junk bond ratings for the Caribbean island are
emphasizing recent tax hikes, spending cuts and other fiscal
reforms in meetings with U.S. credit agencies, Puerto Rico's
governor said on Tuesday.
"We are showing that we have done more than what they
expected to attend to the fiscal credit challenges the
administration faced when we arrived," Gov. Alejandro Garcia
Padilla said at a news conference.
Treasury Secretary Melba Acosta Febo and leaders of the
Government Development Bank for Puerto Rico met for three days
through Tuesday with analysts for Standard & Poor's, Moody's
Investors Service and Fitch Ratings.
Puerto Rico initiated the New York briefings just hours
after S&P on Friday became the third of the three agencies to
put the island with $70 billion of municipal bonds outstanding
on review for possible ratings cuts to non-investment grade.
The meetings also come as Puerto Rico readies for a bond
sale increasingly seen as a test of the island's
creditworthiness. All three agencies have said Puerto Rico needs
to tap the muni market to keep its investment-grade rating.
Since taking office a year ago, Garcia Padilla has cut the
government's projected annual budget deficit, overhauled and
reduced spending for a government pension system, stepped up tax
collections and moved to trim subsidies to government
Many of the reforms have won investor praise, but have
failed to stem fears about the island's ability to pay its
debts. Puerto Rico's bonds have been in a slump since September,
with some carrying tax-free yields of 10 percent.
Referring to another of his reforms, a locally unpopular
overhaul of the island's underfunded system of teacher pensions,
the governor reiterated that a court move paralyzing
implementation of the teachers reform was "very dangerous."
On Monday, the island's Supreme Court consolidated lawsuits
filed against the proposed reform to expedite proceedings. The
court appointed a special commissioner in the case to collect
evidence, hold a hearing and submit a report on its findings by