S&P Improves Puerto Rico GO Rating

S&P has upgraded Puerto Rico’s general obligation (GO) rating to BBB from BBB minus. The outlook is stable. The upgrade reflects the commonwealth’s recent revenue performance and continued efforts to achieve fiscal and budgetary balance. The agency says that governor Luis Fortuno’s fiscal stabilization plan, which includes a 17% reduction in payroll expenditures, is an important step toward budget stability. However, S&P does not anticipate the achievement of a structurally balanced budget until the 2013 fiscal year.