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By Brendan A. McGrail and Matt Robinson
March 8 (Bloomberg) — Puerto Rico, the U.S. territory that reduced its budget deficit by more than a third since 2009, is selling $250 million of debt after its first credit-rating upgrade since Standard & Poor’s began coverage in 1986.
S&P yesterday boosted the commonwealth’s general-obligation rating one level to BBB, the second-lowest of 10 investment grades, because of improved tax collections. Puerto Rico is graded BBB+ by Fitch Ratings, one level above S&P, and A3 by Moody’s Investors Service, two levels higher.
Puerto Rico is more reliable because Governor Luis Fortuno, who took office in January 2009, has cut spending and controlled debt, said Richard Larkin, director of credit analysis at Herbert J. Sims & Co. in Iselin, New Jersey, which manages about $1 billion.
“I’m not surprised about the upgrade,” Larkin said in a telephone interview. “What he’s done could be a model for other governors.” Read the rest of this entry »
March 10, 2011 in puerto rico economic policy, puerto rico economy | Tags: conservative fiscal policy, economy puerto rico, fiscal policy puerto rico, PRFAA, puerto rico credit rating | Leave a comment
Posted March 7, 2011 at PRFAA.com
Standard & Poor’s gives Island’s credit its first upgrade in 28 years; Business Monitor International improves its economic forecast for Puerto Rico
In what constitutes yet another endorsement of the Government of Puerto Rico’s management of its fiscal and economic agenda during the last two years, credit rating agency Standard & Poor’s has upgraded its rating for Puerto Rico’s general obligation debt improving it from BBB- to BBB, Governor Luis Fortuño and his economic and fiscal team announced today.
This is the first upgrade S&P has given Puerto Rico’s credit in 28 years.
“In our opinion, Puerto Rico continues to face significant fiscal and economic challenges. However, in the two years since his inauguration, the administration of Gov. Fortuño has made fiscal stability a priority…The fiscal measures adopted by the Fortuño administration, represent, in our opinion, a factor that lends near-term stability to the credit of the commonwealth, and that could yield the projected results by fiscal 2013 if the economy stabilizes and expenditure discipline is maintained,” states S&P in its report issued today. Read the rest of this entry »