Juan Paulson No Longer Key To Puerto Rico’s Financial Survival

Author:
Updated:
Original:

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]

Related

Puerto Rico Not Picky, Will Take Felipe, Esteban, Carlos, Or Guillermo If Juan Paulson Won't Make The Move

Earlier this month, Bloomberg reported that John Paulson was considering making Puerto Rico his home for a little more than half the year, having been intrigued by the idea of working from the beach and not having to pay capital gains taxes. For its part, PR was pretty excited about the prospect of the hedge fund manager calling the island home on tax forms, as his presence would create a much needed you scratch our back we'll scratch yours situation for the local economy. And while a spokesperson for Paulson has categorically crushed the dreams of the Commonwealth, apparently everyone has gotten over it pretty quickly and would like to make it clear that anyone with money to spend is welcome, nay, encouraged to come on down. Millionaires would be good, billionaires are better but beggars/choosers/etc.