Moody’s Investors Service has placed the University of Puerto Rico’s ratings on Watchlist for possible downgrade, affecting $652 million of rated debt issued through AFICA, as the as the Authority of Financing for Industrial, Tourism, Educational, Medical and Environmental Control Facilities is known.
The agency expects to conclude its review within 90 days.
The action is a follow-up to last week’s downgrade of the government’s overall rating to Baa1 with a negative outlook from A3 with a negative outlook.
“The University is heavily dependent on the Commonwealth support for more nearly 75 percent of fiscal year 2010 operating revenues,” Moody’s said. “The University’s very strong market position as the only public higher education institution in Puerto Rico, and its role in economic development, remains significant credit strength.”
During our review period, Moody’s assess the UPR’s relationship with the central government and expectations for future financial support, the school’s governance and management, and future strategic, capital and debt plans.
“The outcome of the review process could result in a rating downgrade of more than one rating level,” Moody’s said.