Moody's Puts Puerto Rico Garvees on Review for a Downgrade

Moody’s Investors Service has placed its A2 rating on the Puerto Rico Highways and Transportation Authority grant anticipation revenue bonds on review for a possible downgrade.

Moody’s took the action Wednesday after the PRHTA drew on a debt reserve fund to make a payment. The PRHTA did this after the United States Treasury withheld federal highway grant payments pledged for the bonds.

The Garvees are secured through a lien on Puerto Rico’s federal highway reimbursements.

Puerto Rico owed a debt to the U.S. Army Corps of Engineers that was not paid. In response, the Treasury withheld the highway grant payment due the PRHTA. The PRHTA owed a payment on May 16 or 17. It drew on its debt service fund on May 19 to make the payment.

Puerto Rico and the Army corps are in discussions to be sure that no further federal payments will be withheld.

Moody’s says that its review will likely be completed within 90 days.

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Transportation industry Puerto Rico
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