Standard & Poor's Ratings Services said it affirmed its BB long-term rating and underlying rating on the University of Puerto Rico's existing university system revenue bonds, some of which were issued by the Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, and removed the ratings from CreditWatch with negative implications.
The outlook is negative.
"The negative outlook reflects our view that, during the next year, the Puerto Rico economy could weaken further, which could increase pressure on the budget and may result in declines or delays in state appropriations or operating liquidity," said Standard & Poor's credit analyst Bianca Gaytan-Burrell.
Although state appropriations are not pledged to the bonds, they make up the largest portion of revenues available for operations.
"We could lower the ratings on these university system revenue bonds if the Puerto Rico general obligation rating is lowered or if a delay or reduction in state appropriation payment pressures the university's operating liquidity," continued Gaytan-Burrell. "Although unlikely, we could revise the outlook stable if the university improves financial resources or if we revise the outlook on Puerto Rico back to stable."
Total debt is $620 million, including the $531 million of revenue bonds.
