Puerto Rico's Debt Now Junk As Expenses Continue To Outpace Revenue

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Mark Melin
Published on
Updated on
Puerto Rico PREPA

Standard & Poor cut Puerto Rico’s credit rating to junk status today, a move that had been anticipated by market watchers. S&P had placed Puerto Rico’s rating on downgrade notice last month and today it moved the rating to BB+ which is one level below investment grade.  Previously it was rated BBB-. “The downgrades follow our evaluation of liquidity for the Commonwealth,” an S&P press release stated. Concerns are that political and government leaders will be placed in a difficult position of dramatically reducing spending or somehow raising revenue to fill the gap. As reported in ValueWalk two days ago, Puerto Rico Governor…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.