Puerto Rico Yields Fall to 2-Month Low as Debt Sale Awaited

Yields on some Puerto Rico bonds fell to a two-month low as investors said yesterday’s cut to junk status spurred buyers who had been delaying purchases in anticipation of a planned debt offer from the commonwealth.

Standard & Poor’s lowered Puerto Rico general obligations one step to BB+, the highest speculative-grade level, citing the U.S. territory’s limited ability to raise money in the capital markets. The move may be spurring buying from those who were waiting for the island to fall to junk before putting cash to work, said Bill Delahunty, director of municipal research in Boston at Eaton Vance Management.