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Thursday, June 16, 2016

Puerto Rico And The State of The U.S. Bond Market

Samuel Rosin

United States held municipal bonds have reached peak investment. Des-
pite record-low yields due to consistently low interest rates, record high
investment led municipal bond funds to accrue $632 billion in assets as
of June 1.

This comes in direct contrast to Puerto Rican municipal bonds. Reduced
to junk status in 2014 by three major credit agencies, the island’s local,
state, and national tax-exempt bonds make up the vast majority of its $70
billion debt.

On May 1, Puerto Rico defaulted on the first major scheduled payment on
its municipal bonds...[CONTINUE READING]

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