Hints and tips:
...“They are trying to play the green idea,” said one bond fund manager. “It’s smart.”...
...Even as Puerto Rico was becoming a distressed credit, muni-bond mutual funds had to buy its bonds because Puerto Rico was a component of the index....
...In the hour-long podcast, Mr Paulson touched on topics including his bet on Puerto Rico as a tax haven, his support for US President Donald Trump, his push for the government to privatise Fannie Mae and...
...That could be a nod to recent events in Puerto Rico, where customers were caught out after using loans secured against portfolios of government bonds to buy more government bonds....
...“Puerto Rico has to meet its constituents’ basic needs,” said Julio Bonilla, a portfolio manager at Schroders, who does not own any of the island’s bonds....
...They were created in 2006 to help Puerto Rico borrow billions more. The two account for $31bn of Puerto Rico’s $74bn of bond obligations that will fall due over the next four decades....
...– From the NYT again: “The teachers’ pension fund in Puerto Rico looks very much like a legalized Ponzi scheme — one that might hold a warning for teachers across America....
...My long-form recommendation was the New York Times’s analysis of mortality in Puerto Rico to estimate the death toll from Hurricane Maria....
...“I don’t think it is in anyone’s interest to litigate. This provides liquidity that the general fund needs.”...
...Puerto Rico has already defaulted on bonds issued by two of its agencies....
...While it is effectively impossible to directly short sell Puerto Rico’s $70bn of bonded debt, it would have been quite possible to dump the shares of municipal bond insurance companies who guaranteed some...
...Puerto Rico debt is a mainstay of muni bond portfolios given the island’s triple tax exemption, with over 60 per cent of US municipal mutual funds holding the securities, according to Morningstar....
...US municipal bond funds and individual investors dumped Puerto Rico at the low prices offered by distressed debt speculators....
...“Because Puerto Rico bonds are held by so many funds, everything that impacts their outlook also has the potential to impact broad markets,” says Chris Ryon, co-portfolio manager of Thornburg Municipal Bond...
...Debt woes among some of the largest issuers of muni debt, such as Puerto Rico, also cast a shadow on the outlook for the broader muni market....
...Puerto Rico’s municipal bonds have also worked out well as trading vehicles, if not long-term investments....
...According to Morningstar, the fund analyst, Puerto Rico’s bonds have found their way into about 70 per cent of all muni funds....
...Puerto Rican bonds are exempt from federal, state and local taxes regardless of the state the bondholder resides in, making them a ubiquitous feature in muni bond portfolios....
...“In the case of Puerto Rico, and in spite of the discount on the bonds, the hedge funds may actually be overpaying,” said Jason Brady, a portfolio manager at Thornburg Investment Management....
...to live in Puerto Rico,” Mr Paulson said....
...to Puerto Rico....
...“Governments will continue to be a bad bet, whether it is Puerto Rico, Russia or Detroit.”...
...Moeldoko: China’s dismaying new claims in the South China Sea (WSJ) John Paulson Calls Puerto Rico Singapore of Caribbean (Bloomberg) Sugar: Drastic measures (Financial Times) The Co-op, the bananas and...
...Mr Winterstein said he had “eliminated” Puerto Rico debt from his portfolios and expected the bonds to underperform in the short term....
...“Central banks are buying the last remaining AAA-rated sovereign bonds following the downgrades in the eurozone at the start of the year,” says Mansoor Mohi-uddin at UBS....
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