SAN FRANCISCO, Jan 2 (Reuters) -
Facing the prospect of losing its investment grade credit rating if it can’t tap capital markets, Puerto Rico plans to issue long-term debt in coming weeks, a spokeswoman for the commonwealth’s Government Development Bank said on Thursday.
Alix Anfang, who works for public relations firm SKDKnickerbocker in New York, declined to provide details on the intended sale by Puerto Rico which is trying to avoid having its bond ratings cut to junk status.
Concerned about Puerto Rico’s fiscal and economic troubles, credit rating agencies have said they may drop the island’s general obligation debt to junk bond status, a move that would be widely felt in the $3.7 trillion U.S. municipal bond market.
Puerto Rico’s debt is held by many mutual funds and other institutional investors as the island pays the highest interest rates of any big U.S. municipal debt issuer.
With some $70 billion of municipal bonds outstanding, the economically beleaguered commonwealth has raised taxes, taken on pension reform and cut staff to address chronic budget deficits.