Reuters – Puerto Rico’s municipal tax-free bonds yields are luring a new class of buyers: hedge funds and distressed debt investors betting the Caribbean island will keep servicing its massive debt.
Trading volumes in Puerto Rico general obligation bonds, which are rated barely investment grade and may tumble into junk-bond territory, spiked in mid-September. Yields jumped for a few trading days above the magic number of 10 percent and prompted Puerto Rico finance officials to scale back their 2013 schedule of planned muni market sales.
