Standard & Poor's Ratings Services said it lowered its long-term rating and underlying rating to CCC-minus from CCC-plus on the University of Puerto Rico's existing university system revenue bonds.
It also lowered the stand-alone credit profile (SACP) on the university to ccc-minus from ccc-plus. At the same time, Standard & Poor's has removed the rating from CreditWatch, where it was placed with negative implications on April 27, 2015, and assigned a negative outlook.
Some of these bonds were issued by the Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority.
The downgrade reflects the lowering of the general obligation rating of the commonwealth of Puerto Rico to CCC-minus/Negative.
"The rating on the university has moved in tandem with the commonwealth rating given the university's significant dependence on the commonwealth [about 68% of 2014 revenues]," said Standard & Poor's credit analyst Bianca Gaytan-Burrell. "Although appropriations are not pledged to the bonds, they make up the largest portion of revenues available for operations. Any delay or reduction in appropriations could have a serious effect on its operations."
