Moody’s Investors Service has revised its rating outlook on the University of Puerto Rico to negative and confirmed the Baa2 rating on its pledged revenue bonds and Baa3 rating on its Series 2000A bonds.

The outlook reflects the negative outlook of the Commonwealth of Puerto Rico, on which the university relies for 71% of operating revenues.

Moody’s rates Puerto Rico at Baa1 with a negative outlook.

Other challenges Moody’s cites include “razor-thin” liquidity, with only $3.3 million of unrestricted monthly liquidity, and ownership of Servicios Medicos Universitarios, its academic medical center, which has produced substantial operating losses. 

The credit ratings were downgraded to Baa2 and Baa3 ratings from Baa1 and Baa2, respectively, in November after being on review for possible downgrade since last August.

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