Puerto Rico will use the same Wall Street banks that marketed its junk-rated bond deal in March to sell as much as $2.9 billion of debt back by petroleum-tax revenue, according to three people familiar with the plan.
Barclays Plc (BARC) will lead underwriters on the deal, said the people, who requested anonymity because the Government Development Bank, which works on the island’s borrowings, hasn’t announced the details. Morgan Stanley (MS) and RBC Capital Markets will serve as co-lead managers, two of the people said.
The three companies handled the struggling U.S. territory’s $3.5 billion general-obligation offer in March, the largest speculative-grade borrowing ever in the $3.7 trillion municipal market. The banks working on the petroleum-tax borrowing were reported by Reuters earlier. Debt of Puerto Rico, which is tax-exempt throughout the U.S., has traded at distressed levels for more than a year.
The deal may price as soon as January, according to one of the people. Officials had planned to sell the debt this year to bolster the Development Bank’s cash.
Lawmakers returned today for a special session after failing earlier this month to pass a bill authorizing the borrowing. The plan would allow the Infrastructure Financing Authority to sell the bonds, with proceeds repaying debt the Highways & Transportation Authority owes the GDB.
The GDB declined to comment through a New York-based spokesman, David Millar. Marc Hazelton, a spokesman in New York for Barclays; Elisa Barsotti at RBC in New York; and Lauren Bellmare, a spokeswoman for New York-based Morgan Stanley, all declined to comment.
For Related News and Information: Puerto Rico Rally at Risk With Rising Debt Expenses: Muni Credit Puerto Rico Governor to Call Special Session on Bond Bill Puerto Rico Notes Show Cost of Economy’s Struggle: Muni Credit
To contact the reporter on this story: Michelle Kaske in New York at mkaske@bloomberg.net
To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Mark Tannenbaum, Mitchell Martin
Puerto Rico Said to Pick Barclays to Lead $2.9 Billion Offer
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