Moody's downgrades $6.8 bln of Puerto Rico sales tax bonds

October 3, 2013

NEW YORK, Oct 3 (Reuters) - Moody's Investors Service downgraded on Thursday $6.8 billion of Puerto Rico senior sales tax revenue bonds, citing a weak economy and the much weaker underlying credit rating of the U.S. commonwealth.

"Persistent and cumulative effects of the weak economy of the commonwealth of Puerto Rico has significantly constrained growth in sales tax revenues," Moody's said in a statement.

Moody's cut the bonds to A2 from Aa3 and also affirmed $9.2 billion in subordinate bonds at A3. The outlook for both ratings was revised to negative from stable.

Moody's also affirmed Puerto Rico's general obligation bonds at Baa3.