Puerto Rico ruling highlights importance of parent government credit quality

Source: Genevieve Nolan, Gregory W. Lipitz, Naomi Richman, Timothy Blake, Leonard Jones, Alexandra S. Parker, Moody’s, Sector In-Depth, May 2019
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A court decision that Puerto Rico is not required to pay debt service on bonds backed by special revenues during its bankruptcy-like proceedings underscores how such debt is not immune from default, and that the credit qualities of a general government and its related enterprises are closely related…..