Junk Deals Derailed as High-Yield Muni Funds Pull in Less Cash
- Sales postponed for Florida railroad, Texas methanol plant
- Investors say deal size and lack of cash are reasons for delay
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The municipal-bond market is forcing high-yield borrowers to scrap their junk.
The Florida Development Finance Corp. this week postponed a $1.75 billion unrated bond sale for All Aboard Florida, a passenger railroad backed by Fortress Investment Group LLC, that underwriters have been marketing since August. A Texas agency has delayed pricing $1.4 billion of speculative debt for a methanol plant since releasing offering documents Oct. 19. And the Puerto Rico Aqueduct & Sewer Authority, struggling to access capital as the island staggers toward default, couldn’t lure buyers even with yields of 10 percent.