Puerto Rico’s general-obligation bonds were cut one step to speculative grade by Standard & Poor’s, which cited reduced access to liquidity.

The territory had $16.2 billion of debt backed by its full faith and credit as of June 30, according to the Government Development Bank for Puerto Rico, which handles capital-market transactions for the island.

About 70 percent of U.S. municipal mutual funds own Puerto Rico securities, which are tax-free nationwide, according to Morningstar Inc.