NEW YORK, July 17 (Reuters) - The probability of Puerto Rico defaulting on its securities is approaching 100 percent, Moody’s rating agency said on Friday, adding that the more legally vulnerable bonds carry the greatest potential for loss.
Puerto Rico’s Public Finance Corporation (PFC) on Wednesday failed to transfer $93.7 million to pay the principal and interest on its bonds due on Aug. 1. That puts at immediate risk a payment of $58 million due on Aug. 1, Moody’s said.
Without remedial action by either the legislature or commonwealth’s fiscal agent, Puerto Rico will default on this payment, Moody’s said.
“The heightened prospects for non-payment of PFC debt service on August 1 are consistent with our view that the probability of default on Puerto Rico’s securities is approaching 100 percent, and the more legally vulnerable bonds carry the greatest loss potential,” Moody’s wrote. (Reporting by Megan Davies; Editing by Chris Reese)