S&P Downgrades Puerto Rico Bonds, Calls Default 'a Virtual Certainty'

Standard & Poor's Ratings Services lowered its credit rating on debt issued by Puerto Rico Public Finance Corp. in 2011 and 2012 from "CCC-" to "CC" Thursday. The ratings agency said a default on those bonds is "a virtual certainty" when the next payment comes due on Aug. 1. Puerto Rico's legislature did not allot for debt-service payments in its budget for the 2016 fiscal year, which S&P said was the reason for its downgrade. The credit-ratings firm put the rest of outstanding debt issued by the island commonwealth on a negative creditwatch. Puerto Rico's government has recently asked creditors to join a discussion about restructuring its debt.