Puerto Rico’s revised fiscal plan shows surplus; bonds rally

Author: , Post Date: October 23, 2018

Puerto Rico’s revised fiscal plan shows surplus; bonds rally

(Reporting By Luis Valentin Ortiz in San Juan; Editing by Daniel Bases and Cynthia Osterman)

Shaun Burgess of Cumberland Advisors

Excerpt below:

SAN JUAN, Oct 22 (Reuters) – Puerto Rico’s federally appointed financial oversight board issued a new version of the U.S. commonwealth’s five-year fiscal plan on Monday.

“A revised fiscal (plan) that shows more money for creditors and recognizes Puerto Rico’s ability to pay – that is driving GOs higher… There is still a lot of execution risk as the fiscal plan relies on some assumptions and policies being put in place,” said Shaun Burgess, a portfolio manager at Cumberland Advisors in Sarasota, Florida.

“This was definitely a surprise and it is an admission that they can cover debt service and have a surplus. Definitely hurts the commonwealth narrative that they are broke when you see they can pay debt service and have a surplus of many millions of dollars,” he added.

Puerto Rico filed on Friday its first plan of adjustment, which would tackle roughly $16 billion in COFINA debt. Final court approval was expected in early 2019.

Read the full article here: CNBC.com

cumber map
Cumberland Advisors® is registered with the SEC under the Investment Advisers Act of 1940. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. Such an offer can only be made in the states where Cumberland Advisors is either registered or is a Notice Filer or where an exemption from such registration or filing is available. New accounts will not be accepted unless and until all local regulations have been satisfied. This presentation does not purport to be a complete description of our performance or investment services. Please feel free to forward our commentaries (with proper attribution) to others who may be interested. It is not our intention to state or imply in any manner that past results and profitability is an indication of future performance. All material presented is compiled from sources believed to be reliable. However, accuracy cannot be guaranteed.