Moody's takes chainsaw to Puerto Rico credit rating

|By:, SA News Editor

Moody's downgrades Puerto Rico's GO bond rating by a big three notches to B2 from Ba2, and cut ratings on the commonwealth's other debt as well in wake of last week's passage of a law allowing public corporations to defer or reduce debt payments.

"Puerto Rico’s new law marks the end of the commonwealth’s long history of taking actions needed to support its debt. It signals a depleted capacity for revenue increases and austerity measures, and a new preference for shifting fiscal pressures to creditors."

MBIA (MBI -0.6%), Assured Guaranty (AGO -3.1%)

Previously: U.S. firms take new Puerto Rico law to court