Aug. 26 (Bloomberg) -- Puerto Rico general obligations maturing in July 2026 rallied today to the highest average price since Feb. 20, according to data compiled by Bloomberg.
The junk-rated securities are the island’s most-traded general obligation today, Bloomberg data show. The securities are benefiting from the Detroit Water and Sewerage Department’s ability to sell $1.8 billion of revenue bonds today, said Daniel Solender, who helps manage $15.5 billion of munis at Lord Abbett & Co. in Jersey City, New Jersey.
The Michigan Finance Authority issued the debt on behalf of Detroit’s water and sewer utility after the city’s record bankruptcy filing last year. Proceeds will finance the purchase of debt from investors last week.
“If Detroit can come to the market with this type of deal, maybe Puerto Rico has more options than people expected,” Solender said.
Commonwealth general obligations maturing in July 2026 traded today at an average price of 80.17 cents on the dollar, for a tax-exempt yield of 8.14 percent.
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