Sure, it’s happy that he likes the place and keeps throwing money at it. But it turns out that JP’s not the only hedge fund manager with a taste for the tropical island.
Prices on the U.S. territory's bonds surged as much as 7.5% in heavy trading Wednesday, a day after hedge funds, mutual funds and other investors scrambled to get a piece of a $3.5 billion debt sale, Puerto Rico's largest ever.
Buyers were enticed by generous potential returns—the bonds were priced to yield 8.73%, an unusually high level for a tax-exempt issue—and by the knowledge that other investors were lining up to get in on the deal. Barclays PLC, the bank leading the debt sale, tapped its larger corporate-bond salesforce to help pitch the Puerto Rico bonds to investors beyond just those traditionally interested in municipal debt. The banks involved received more than $16 billion in orders, and fund managers who got half the bonds they requested counted themselves lucky. Others received as little as 10% of what they had asked for.
Investors Flip for Puerto Rico’s Debt Offering [WSJ]
Major Investments Add Momentum to Puerto Rico’s Economic Resurgence [PR Newswire]