UPDATE 1-Puerto Rico to issue $900 mln in notes over next 30 days -source

Puerto Rico will aim to sell $900 million in tax and revenue anticipation notes in the next 30 days to meet near-term cash needs, a source familiar with the matter said on Friday.

Tax and revenue anticipation notes are standard cash flow instruments designed to meet expenses throughout the year, but the deal is likely to attract attention given the U.S. commonwealth's financial troubles.

The sale would mark the first time Puerto Rico has sought to raise financing since it passed a controversial law in June that allows some of its public corporations to default on their debt.

Puerto Rico said in July that it would aim to complete its so-called TRANs financing by the end of the first quarter of its fiscal year on Sept. 30.

The source, who could not be named because the deal is not yet public, described the issue as "pretty standard."

Puerto Rico's bonds have rallied in recent weeks after a sell-off following the passage of the law known as the Recovery Act. General obligation bonds maturing in 2035 with an 8 percent coupon traded at 91 cents on the dollar on Friday compared to a low of 83.50 back in June.

Those bonds were part of a $3.5 billion sale in March, the last time Puerto Rico sold bonds, in a heavily oversubscribed deal that attracted a lot of interest from hedge funds.

It was unclear if the latest sale would involve a private placement or be financed via the market. The New York Times reported on Friday that JPMorgan Chase was likely to arrange financing. JPMorgan declined comment.

A group of hedge funds, including Fir Tree Partners and Davidson Kempner Capital Management, said recently they would be willing to help Puerto Rico meet its financing needs if its troubles meant it was denied market access.

Puerto Rico has over $70 billion in outstanding debt. Its power authority, known as PREPA, recently hired a restructuring officer to overhaul its business in a process that could lead to a writedown of the agency's more than $9 billion in debt. (Reporting by Edward Krudy; Editing by Chris Reese and Tom Brown)

By Edward Krudy

UPDATE 1-Puerto Rico to issue $900 mln in notes over next 30 days -source