Standard & Poor's cuts Puerto Rico's financing arm, says default certain
Source: Reuters
Standard & Poor's cut the credit rating of Puerto Rico's Government Development Bank (GDB) to 'CC' from 'CCC-' on Tuesday, saying a near-term default at the U.S. territory's financing arm was a virtual certainty.
The downgrade comes after the GDB said it may seek to buy back up to $4 billion of notes at below par as the U.S. commonwealth attempts to restructure up to $72 billion in debt, according to a regulatory filing on Friday.
"We would deem such an exchange as distressed and consider it a default under our criteria," said Standard & Poor's credit analyst Brendan Browne in a statement.
Standard & Poor's 'C' rating is a non-investment grade that indicates a high risk of default.
Read more: http://www.reuters.com/article/2015/07/14/usa-puertorico-gdb-idUSL2N0ZU2MQ20150714
Longer article in Spanish by El Nuevo Dia: Standard & Poor's degrada al BGF (Banco Gubernamental de Fomento)
cstanleytech
(26,342 posts)Igel
(35,383 posts)Another case of "everybody saw it coming." Slo-mo train wreck.
Issue debt, and not only spend the money but don't fix problems. In fact, they got worse without "austerity." And that's without, IIRC, federal income taxes.
They have a very much non-Greek problem though: They can't go to places like the IMF to take out loans. They have the bond market and ... the bond market. They're like a state in that regard, but very much not like a state in others.
Recursion
(56,582 posts)This may hasten calls for either statehood or independence.
pscot
(21,024 posts)jtuck004
(15,882 posts)Nitram
(22,932 posts)jtuck004
(15,882 posts)S&P who, just like Goldman and all the others work under a disclaimer that they may be working against you, and helped the banks throw 7 million families out of their homes.
There is ALWAYS someone on the other side of such transactions that is going to get hurt for you to prosper. That is how we do it here - and why we are leaving about 45 million Americans on food stamps to help traitors to the country like this stay wealthy.
Then again, one might wonder what kind of slithery individuals need to do business with thieves like this, or Goldman, or Chase, etc.