NEW YORK--(BUSINESS WIRE)--
The number of hedge funds trading Puerto Rico (PR) bonds is increasing, although exposure to specific credits has become bifurcated by whether they support or oppose the new Public Corporation Debt and Enforcement Recovery Act, according to a new report from Fitch Ratings.
Fitch estimates there are now over 60 alternative fund managers holding more than $16 billion of the island's debt in aggregate. Some of these fund managers support the Recovery Act in order to ring-fence commonwealth obligations from PR public corporations while others are suing to annul it.
On the traditional side, total U.S. mutual fund ownership of PR bonds has declined to 52% of the $65.1 billion market. But the remainder is concentrated among two large U.S. fund managers who together hold more than $23 billion of PR bonds. On contrast, Fitch-rated U.S. closed-end funds across 14 other fund managers have reduced their PR holdings on average by 65% since summer of 2013. Remaining exposure is being held in sales tax and general obligation issuers, half of which is insured.
Fitch estimates that over $23 billion, or 36% of the $65.1 billion Puerto Rico bond market currently carries monoline credit protection, which provides a secondary source of repayment.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Big Changes for Puerto Rico Bond Market (Shift to New Investors Creates Bifurcated Trades)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=756147
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- Mutual Funds
- Bonds
- Fitch Ratings
- Puerto Rico
Fitch Ratings
Yuriy Layvand, CFA, +1 212-908-9191
+1 212-908-9191
Director
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10001
or
Ian Rasmussen, +1 212-908-0232+1 212-908-0232
Senior Director
or
Kellie Geressy-Nilsen, +1 212-908-9123+1 212-908-9123
Senior Director
FitchWire
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations:
Brian Bertsch, +1 212-908-0549+1 212-908-0549
brian.bertsch@fitchratings.com
Yuriy Layvand, CFA, +1 212-908-9191
Director
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10001
or
Ian Rasmussen, +1 212-908-0232
Senior Director
or
Kellie Geressy-Nilsen, +1 212-908-9123
Senior Director
FitchWire
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations:
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com
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