Republican Congressional candidate Jorge Bonilla has issued the following statement in response to Standard and Poor’s recent downgrade of the Commonwealth of Puerto Rico’s bond rating to speculative, or “junk” status.
“Generations of fiscal mismanagement have finally caught up to the Commonwealth of Puerto Rico, and its bond rating was cut to speculative (also known as “junk”) status. Unfortunately, Puerto Rico’s political class has scrambled to get their talking points out instead of coming together and focusing on the island’s deep structural problems.
Puerto Rico’s bond market problems are relevant to all of us for several reasons. Puerto Rico’s rate cut may have been the first, but there are also many cities and states on equally precarious footing. Additionally, our federal government keeps piling on debt like there is no tomorrow. We must enact reforms that address our ballooning debt and deficits at all levels of government.
Also, it’s no secret that many of the residents of the 9th Congressional District have deep ties to Puerto Rico, whether of blood, affection, or both.
Instead of pandering to the Puerto Rican community, our Congressional District’s Representative must have a deep understanding of the failed policies that have wrecked the island and forced the equivalent of three Mariel Boat Lifts over the past fifteen years, as well as the resolve to fight the implementation of those very policies stateside.”
S&P said it worried that Puerto Rico, a Caribbean island populated by 3.62 million people, has limited ability to sell more debt in the U.S.’s $3.7 trillion municipal bond market and faced possible cash shortages.
“We believe these liquidity constraints do not warrant an investment-grade rating,” S&P said in a commentary.
The move could also squeeze the island commonwealth’s cash reserves. S&P peer Moody’s, in a Dec. 23 report, said Puerto Rico could face up to $1 billion in collateral demands and note accelerations in the case of a one-notch downgrade by any of the ratings agencies.