"The 'C' rating indicates Fitch's belief that default of some kind on the COFINA [Sales Tax Financing Corporation] and ERS [Employees Retirement System] bonds appears inevitable due to the Commonwealth's previously stated intent to restructure its debt," the release stated on Friday.
On Wednesday, the governor of Puerto Rico Ricardo Rossello petitioned for debt relief under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). The US territory owes $73 billion in loans and $49 billion in unfunded pension obligations, according to a court filing.
Fitch added that the Commonwealth's Issuer Default Rating (IDR) is still 'RD', which means that the issuer has failed to pay a certain part of its debt.
Earlier on Friday, New York Judge Laura Taylor Swain has been selected to handle the bankruptcy case.
