Puerto Rico's Looming Bankruptcy Exit Set to Soothe Island's Turbulent Muni Debt
- G.O. bond trades at 90 cents after falling to 21 cents in 2017
- Judge may rule as soon as this month on Puerto Rico debt plan
Pedestrians walk through the Old San Juan.
Photographer: Xavier Garcia/BloombergThis article is for subscribers only.
Puerto Rico’s anticipated exit from bankruptcy is pushing up prices on one of the most actively-traded securities in the $4 trillion municipal-bond market -- a commonwealth 8% coupon general obligation bond -- with the momentum poised to continue after a debt restructuring.
The commonwealth is inching closer to resolving its more than four-year bankruptcy, which will slash $22 billion of bonds down to $7.4 billion through a debt exchange and enable the commonwealth to begin repaying bondholders again as soon as this year.