Moody's on Oct. 2 said Puerto Rico and the U.S. Virgin Islands will meet new challenges to their credit quality and finances after the two U.S. territories were hit by Hurricanes Irma and Maria.
The rating agency said both territories were hit while already suffering financial distress.
"Puerto Rico is undergoing a debt restructuring under federal oversight and the U.S. Virgin Islands has extremely weak liquidity. Both will be heavily reliant on relief from the U.S. federal government," said Moody's.
Moody's Analytics' preliminary estimate of Maria's total cost to Puerto Rico, including lost output, is $45 billion to $95 billion, or about 65% to 135% of GNP.
Even before the hurricanes struck Puerto Rico, its economy based on nominal GNP was expected to shrink each year through 2021, according to the fiscal plan certified by the federal board overseeing its debt restructuring.
U.S. President Donald Trump, who visited Puerto Rico on Oct. 3, said in an interview with Fox News that the island's debt will have to be "wiped out," Reuters reported.
Puerto Rico, with a $72 billion debt load, filed the biggest bankruptcy in U.S. municipal history in early 2017. Moody's said the amount and timing of federal assistance will be critical determinants of its economic recovery.