Puerto Rico Pension Fix Allays Insolvency Concern: Muni Credit
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Puerto Rico debt is set to extend its longest rally in a year as proposals to fix a pension system on the brink of insolvency encourage investors that the U.S. commonwealth is tackling its biggest fiscal challenges.
The island’s bonds, which are tax-exempt in all U.S. states, have lured buyers nationwide hunting for extra yield. Puerto Rico revenue-backed securities due in 2023 yield 2.08 percentage points more than top-rated municipal debt, close to a two-month low, data compiled by Bloomberg show. They have been gaining since mid-January.