Fitch downgrades Puerto Rico's general obligation bonds, citing new debt restructuring law

Markets Associated Press

Fitch Ratings has downgraded $13.4 billion worth of Puerto Rico's general obligation bonds as well as bonds issued by the island's water and sewer company.

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Fitch said Wednesday that the downgrades are a result of a newly approved law that allows certain public corporations in Puerto Rico to restructure their debt if needed.

The announcement comes more than a week after Moody's said it was downgrading $14.4 billion worth of outstanding Puerto Rico general obligation bonds.

The U.S. territory is entering its eighth year in recession and is struggling with a $73 billion public debt load. Puerto Rico sold a record $3.5 billion in general obligation bonds in March despite having its credit rating downgraded to junk status.