Puerto Rico’s Junk Bonds Still Attracting Interest

Puerto Rico municipal bonds have been downgraded to junk status, but the re-rating seems to have already been priced in, creating an opportunity for investors who aren’t limited by restrictions on their high yield exposure. Crossover investors are active in Puerto Rico muni market “Crossover investors continue to play a very active role (the vast majority of them are not sensitive to ratings) and might utilize the downgrade to add to their positions. We reiterate that the Moody’s Corporation (NYSE:MCO) downgrade also seems to be priced in since PR’s bonds have been already trading in distressed territory since August 2013 and…