Moody’s changes Puerto Rico bank view to stable

Moody's Investors Service said it revised the outlook of the Government Development Bank for Puerto Rico (GDB) senior notes to stable from negative.

Concurrently, Moody's affirmed the C rating on the notes.

On Nov. 6, the federal court overseeing Puerto Rico's restructuring approved the settlement entered with GDB creditors.

The approval is the final act in a series of procedural requirements before the GDB debt recovery authority can issue new securities to creditors in exchange for existing notes.

Investors are receiving new securities with a face amount recovery of 55% and a higher interest rate.

Creditors are expected to recover 41% of outstanding principal, based on Moody's estimated calculation.

“This is slightly above the 0-35% recovery range for the C rating, but our rating assumes lower recovery because the pledged revenue stream is unlikely to provide for full payment on the new bonds,” the agency said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.