Yield spreads on Puerto Rico's debt have widened as the triple tax-exempt commonwealth's fiscal picture has worsened, according to data in a new report this week. But rating agencies say actions by a new governor and a history of coping with such stress warrant the stable investment-grade ratings.

In a Bank of America/Merrill Lynch & Co. research report entitled "Municipals: Bids Weaken," the investment bank stated that the island has "profound economic and financial challenges." In addition, Merrill questioned the commonwealth's stable outlook on its general obligation debt in light of current financial challenges on the island.

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