Puerto Rico Luring Hedge Funds on Record Price Drop: Muni Credit
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Hedge funds and investors in distressed municipal debt are buying into Puerto Rico after prices on the territory’s securities set record lows on concern that its electric utility will restructure its bonds.
As the U.S. territory lurches toward crisis, buyers of risky debt see opportunity, said David Tawil, co-founder of hedge fund Maglan Capital LP, which bought island general obligations this week. The demand may help stem losses in Puerto Rico securities after they posted the biggest weekly drop since at least 1999.