July 14 (Reuters) - Standard & Poor’s cut its rating on Puerto Rico Aqueduct & Sewer Authority’s (PRASA) revenue bonds, backed by the government, by one notch to ‘BB’.
Rating agencies have downgraded Puerto Rico’s debt ratings following a new law that allows the U.S. commonwealth’s public corporations to restructure debt, potentially forcing large losses on bond holders.
“The actions reflect our downgrade of the commonwealth’s general obligation debt,” said Standard & Poor’s credit analyst Theodore Chapman.
The ratings agency also cut its rating on PRASA's revenue bonds to 'BB negative' from 'BB positive' with the outlook being negative. (bit.ly/1oA132T)
The negative outlook affects PRASA’s series 2008A and 2008B revenue bonds, of which $285 million are outstanding.
Standard & Poor’s has also cut PRASA’s stand-alone credit profile (SACP) to ‘bb negative’ from ‘bb positive’. (Reporting By Tanvi Mehta in Bangalore)