Puerto Rico Ruling Sends Shock Through $3.8 Trillion Muni Market
- Puerto Rico ruling may have big implications for muni market
- Decision could trigger credit downgrades, debt repricing
American and Puerto Rican flags fly outside the Capitol of Puerto Rico building in San Juan, Puerto Rico.
Photographer: Xavier Garcia/BloombergThis article is for subscribers only.
A haven for American investors is looking less bulletproof.
A federal court decision in Puerto Rico’s record bankruptcy that departs from past precedent in the $3.8 trillion municipal-bond market is threatening to upend the secure reputation for some types of debt. The legal fight could go all the way up to the U.S. Supreme Court, with the potential to erode the value of billions of dollars in bonds and ripple through a niche that finances roadways, airports and water systems.