Hedge Funds Flock To Puerto Rico Debt

Mar 13 2014 | 12:49pm ET

Puerto Rico spent months attempting to lure hedge funds to participate in a crucial debt offering—and did such a good job that it had to turn some away.

Hedge funds and others flocked to Wednesday’s $3.5 billion offering, Puerto Rico’s largest ever. And interest in the bonds continued after the deal, with prices surging both yesterday and today.

Puerto Rico’s underwriters received $16 billion in orders. Fund managers did well to get half of what they sought, The Wall Street Journal reports, while other investors got just 10% of what they ordered.

The U.S. territory has been struggling under a massive debt load, and was under pressure to show that it could still tap the credit markets. And while the 8.73% yield the new debt will pay is extremely high for municipal bonds, it is still less than the 10% or more that was rumored in January.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of