BusinessWeek – Hedge funds such as Maglan Capital LP and MeehanCombs LP are helping fuel a rally in Puerto Rico debt, signaling that investors who have the most appetite for risk expect the worst may be over for the commonwealth’s bonds.
As yields on obligations of the struggling U.S. territory soared to records in recent weeks, David Tawil, 38, co-founder of New York-based Maglan Capital, has been buying. The purchases mark the first foray into municipal debt for the fund, which typically focuses on distressed U.S. companies. The moves add demand to the $3.7 trillion municipal market at a time of record withdrawals by individuals.
