Candlewood Hedge Fund Plans Fund to Buy Puerto Rico Debt
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Candlewood Investment Group LP, the $3 billion hedge-fund firm run by Michael Lau, plans to start a fund to profit from Puerto Rico’s debt market, as the commonwealth and its agencies struggle with $73 billion of obligations.
The Candlewood Puerto Rico SP fund will target securities including general-obligation bonds, debt of public corporations and the monoline-wrapped space, the New York-based firm said in a presentation obtained by Bloomberg News. Market prices are offering unadjusted yields of 8 percent to 10 percent and U.S. tax-equivalent yields of 16 percent to 20 percent, it said.