Municipal Bond Forum
Puerto Rico question marks
Q
Regarding your article, “Moody’s Downgrades Puerto Rico G.O. Debt“: Obviously the new law and downgrades are jolts to investment sanity after recent ups and downs. Puerto Rico has no revenue upside, their society has too many entitlements, etc. Do you envision them stopping payments on certain bonds or defaulting?
A
James A. Klotz responds:
It is very difficult to give you a definitive answer to your question.
The most likely scenario, in our opinion, would be a restructuring of one or more of the public companies to protect the General Obligation bonds.
It is encouraging that Moody’s has just affirmed Assured Guaranty’s rating.
Start here.
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