PIMCO's Outlook: Puerto Rico's Debt Crisis

Puerto Rico’s Debt Crisis by Joseph Deane, David Hammer, Sean McCarthy, PIMCO Puerto Rico’s municipal debt has been mired in negative news headlines and heightened price volatility. Joe Deane, head of municipal bond portfolio management, Dave Hammer, municipal portfolio manager, and Sean McCarthy, head of municipal credit research, recently discussed the evolving situation and how it affects PIMCO’s muni market outlook and portfolio positioning. Q: Over two years ago, PIMCO implemented a 0% allocation to Puerto Rico’s municipal bonded debt across our dedicated municipal portfolios, a major statement given the amount of the island’s debt outstanding. What led to that…