U.S. Virgin Islands

The utility responded that it is not eligible to declare bankruptcy.

The agency cited the permanent raise to the rum tax cover for the improved outlook.

The Public Service Commission said it will reconsider rates at its August meeting.

Without the increase U.S. Virgin Islands matching funds bonds would have defaulted in the next few years, some observers said.

The U.S. Virgin Islands WAPA said the Public Service Commission's reduction of electric rates jeopardizes its ability to pay bills and provide electric service.

The effects could hit island economies, like those of Puerto Rico and the U.S. Virgin Islands, whose bonds are speculative grade partly because of fiscal concerns.

KBRA said the negative outlook reflects declining coverage of maximum annual debt service coverage from both a lower tax rate and declining rum sales.

Management is hiring a municipal advisor to evaluate its financial strategy.

The introduction of new engines in a northern power plant and the opening of a solar farm in the south have reduced the authority's operating costs.

Observers say the decision may be a credit positive for the financially struggling utility

The governor says borrowing $50 million is "imperative" but the senate majority leader says "continuing to borrow is not the answer."

New facilities should reduce and ultimately eliminate the authority's current $5 million a month operating loss.

Karl Knight worked as chief of staff for U.S. Virgin Islands Gov. Albert Bryan Jr.

The Water and Power Authority got good financial news from the U.S. Federal Emergency Management Agency but bad financial news from a federal court in Puerto Rico.

The WAPA board of directors says it is looking for a replacement who would start on July 1, when Andrew Smith says he will depart.

The authority's CEO said it has no money for facilty maintenance.

The governor should have involved the legislature earlier in decision making on how to give the Water and Power Authority money to make a bond payment, lawmakers said.

The state of emergency will let the governor use the central government's rainy-day fund to provide money to WAPA that semi-autonomous agencies of his government owe the authority. WAPA will use the money to make payments to bondholders and other creditors starting Tuesday.

Congress has taken no significant action on bills that would stop the depletion of the United States Virgin Islands' government pension system for 21 months.

Governor says the money would be used to get through the slow winter revenue months.