Puerto Rico

S&P Global Ratings said it has downgraded the commonwealth of Puerto Rico's general obligation secured debt to D (default) from CC following the commonwealth's default on debt service due July 1.

The Puerto Rico Aqueduct and Sewer Authority will delay payments on loans and renegotiate loan agreement terms under U.S. state revolving fund and rural development programs, according to two forbearance agreements detailed in an event notice posted on EMMA on Wednesday.

The plaintiffs want the court to declare Puerto Rico’s Moratorium Act to be illegal and unconstitutional.

Fitch Ratings said it has downgraded the commonwealth of Puerto Rico's long-term issuer default rating (IDR) to RD from C and general obligation bond rating to D from C following the payment default on certain GO bonds on July 1.

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.

Puerto Rico was poised to pay less than a fifth of the guaranteed debt due on Friday, with none of the payment going to the general obligation debt, according to sources.

Gov. Alejandro Garcia Padilla late Thursday invoked Puerto Rico’s Moratorium Act on the payment of general obligation bonds and obligations of other public entities, opening the door to making partial payments on about $2 billion of debt due Friday.

President Obama signed the Puerto Rico relief bill Thursday, paving the way for the appointment of an oversight board and the first steps in what legislators and observers agree will be a long process of bolstering the commonwealth’s fiscal health.

The Puerto Rico Electric Power Authority announced that it was borrowing $264 million to avoid a default on Friday.

Legislation to rescue Puerto Rico from its debt crisis is moving to President Obama’s desk for a signature after the Senate approved it 68 to 30 Wednesday, just two days before the commonwealth is expected to default on a $2 billion debt payment.