Moody’s Investors Service late Friday assigned a junk rating for the expected multi-billion dollar Puerto Rico bond deal.
Moody’s expects the sale to take place March 11 when the financially-troubled U.S. commonwealth attempts to sell up to $3.5 Billion in so-called GO Bonds. The "Ba2" rating, however, is provisional since Puerto Rico has yet to finalize details of the bond offering.
A statement from Moody’s warns of the dangers both for investors and Puerto Rico even though Moody’s expects the sale to be successful.
“The Ba2 rating reflects our belief that the commonwealth will raise enough cash in the upcoming financing to enable it to maintain an adequate liquidity profile through the end of 2015," the statement said. "Failure to raise sufficient funds in this transaction for Puerto Rico’s pressing liquidity needs would have sever implications for the commonwealth’s credit profile and could result in a multi-notch downgrade.”
Adam Shapiro joined FOX Business Network (FBN) in September 2007 as a New York based reporter.