Bond Buyer Online - Puerto Rico and Detroit --
Investors Tread Fine Line Between Value and Concern:
In a choice between a rock and a hard place, investors favor Puerto Rico over Detroit.
by Christine Albano
Trading in distressed credits from Puerto Rico remains active and prices are appreciating in the secondary market, even after the commonwealth was forced to cut back its bond program for the rest of the year after yields on its debt soared. At the same time, muni experts said, activity is extremely limited especially on uninsured bonds from Detroit, which faces a long and complicated recovery after filing July 18 for the largest municipal bankruptcy to date.
Puerto Rico offers a more enticing reward for those willing to take a chance, municipal experts said, as Gov. Alejandro Garcia Padilla tries to address inherited fiscal challenges, strengthen the economy and keep the island’s teetering credit at investment grade/.