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

Reuters

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

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

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

Moody's also affirmed Puerto Rico's general obligation bondsat Baa3.

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