Puerto Rico Bonds After Maria
Excerpt of article below:
Most Puerto Rican munis are down by two to three cents on the dollar, estimates Kevin Woods, chief investment officer at Asset Preservation Advisors. The benchmark 8% coupon government obligation bonds traded down to 56. Prepa bonds, backed by the island’s electric authority, traded down to 52, and the senior sales-tax revenue bonds, known as Cofinas, are down to 60. “There isn’t a lot of value here,” says Woods.
There is one bright spot—insured bonds have risen, notes John Mousseau, director of fixed income at Cumberland Advisors. Those mainly trade off the financial health of the insurers, and the injection of federal funds may mean those firms don’t have to keep covering interest payments for so many years. Also, Prepa bonds ultimately may have some upside. “This is an awful catastrophe,” Mousseau says. “But now there is a chance to get the infrastructure to a better level, faster with some federal help.”
Read full article at Barron’s (subscription required): http://www.barrons.com/articles/puerto-rico-bonds-after-maria-1506142967
Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.
Sign up for our FREE Cumberland Market Commentaries
Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.