Puerto Rico Bond News
The big news in the muni market last week was the downgrade of the Commonwealth of Puerto Rico debt by first S&P and then Moody’s. The downgrades pushed the island’s general obligation (GO) rating below investment grade for both ratings agencies, and bonds issued by many other Puerto Rico issuers were also downgraded along with the GO downgrade. There did not appear to be a lot of forced selling following the downgrades, and yields did not sky rocket higher (both of which some might have feared). Given where Puerto Rico credits were trading prior to the downgrade (high single digit to low double digit yields) the market was already treating the Commonwealth’s debt as below investment grade prior to the downgrades. Whether Puerto Rico will be able to again tap the financial markets in the upcoming weeks (and at what yield) will remain to be seen, although we believe they plan to sell debt of some form this month.
For the latest update on Puerto Rico or help evaluating municipal bonds which you currently own, call me at (319) 368-7030 or just send me an email at email@example.com
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