S&P Global Ratings said it believes the Commonwealth of Puerto Rico will default on its July 1, general obligation (GO) and appropriation-backed bond principal and interest payments, based on executive orders signed yesterday by Governor Garcia Padilla declaring a debt moratorium.
If a default occurs, S&P expects to lower its GO rating to D (default) from CC with a negative outlook, on the next succeeding business day, July 5.
In its opinion, a default is virtually certain following enactment of federal legislation (PROMESA) that grants an immediate stay on credit litigation that commenced Dec. 18, 2015, or later.
