Moody’s Analytics, a group separate from Moody’s Ratings team, published a recent report (dated 2/3/14) on PR’s CDS-derived probabilities of default:: “Market-based probabilities of default for Puerto Rico have continued to deteriorate since the beginning of the year. The commonwealth’s five-year cumulative CDS- implied EDFTM (Expected Default Frequency) credit measure, for example, rose from 15.86% […]
Aside from dropping the G.O. by not one but two notches to Ba2, Moody’s also downgraded COFINA senior-lien bonds to Baa1 from A2 and its junior-lien bonds to Baa2 from A3. This means the contemplated third lien COFINA bonds will be right on the cusp of junk also.
CUSIP: 84553AAD4 “Despite being the leading provider in its service area, the Obligated Group has operated unprofitably from operations for each of the past three fiscal years and has lost money on a bottom-line basis for each of the past two fiscal years (…) We expect the next two years to be extremely challenging for the […]
According to the Bond Buyer, “Standard & Poor’s downgraded Puerto Rico’s general obligation bonds to speculative, or junk, grade Tuesday afternoon. The rating was cut to BB-plus from the investment grade of Baa1, S&P said on Tuesday. The rating remains on watch negative.”