MOODY'S ASSIGNS A3 RATING, ON WATCHLIST FOR POSSIBLE DOWNGRADE, TO UPCOMING SALE OF APPROXIMATELY $500 MILLION PUERTO RICO GOVERNMENT DEVELOPMENT BANK SENIOR NOTES

Posted on: May 3, 2011, 11:24 am

NEW YORK, May 3, 2011 -- Moody's Investors Service has assigned a rating of A3 to the Government Development Bank for Puerto Rico's (GDB) planned $500 million sale of unsecured senior notes in the U.S. tax-exempt market. The rating is on Watchlist for possible downgrade, reflecting the Watchlist action on the Commonwealth of Puerto Rico's general obligation notes and related debt. The Senior Notes, 2011 Series B (Taxable) are expected to be sold the week of May 11, and will likely be in a fixed rate mode. Proceeds will be used for general corporate purposes, including, but not limited to, increasing its investment portfolio and making loans to, and purchasing obligations of, the commonwealth and its public corporations, instrumentalities and municipalities, and redeeming outstanding notes. The notes rank on parity with other senior debt of the GDB currently outstanding and issued in the future-including long-term, medium-term and commercial paper notes-and are payable from any available funds of the bank including underlying loan repayments, investment income, and sale of refunding notes...

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