July 3, 2014 / 6:01 PM / in 3 years

Moody's cuts rating on Puerto Rico Government Investment Trust Fund

July 3 (Reuters) - 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)

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