Ratings competition is good for muniland

By Cate Long
October 24, 2013

Morningstar Ratings began when it purchased the respected independent rater Realpoint in 2010. Realpoint was only registered to rate structured finance products, and Morningstar has leveraged that authority to begin rating muniland.

Puerto Rico unveils a plan

By Cate Long
October 16, 2013

 

Puerto Rico’s top public officials held a two-hour conference call on Tuesday that was open to all investors. That may have been a first for the Commonwealth. Previous calls and conferences had been relatively restrictive in who was admitted. The yields on Puerto Rico’s debt have skyrocketed and the Commonwealth’s access into the public debt markets has been basically shut down. The open conference call was a good change of approach.

Puerto Rico tax revenues must pick up pace

By Cate Long
October 7, 2013

Puerto Rico’s moral hazard

By Cate Long
October 3, 2013

Puerto Rico’s short term funding needs are sending out warning bells. The Padilla Administration has been pushing the Commonwealth Legislative Assembly to agree to an increase in the Sales Use Tax to 3.5 percent from 2.75 percent. With this diverted revenue, the government could issue a third series of Cofina bonds for approximately $2 billion. This third tranche would be subordinate to the first two series of Cofina bonds, but have higher ratings than PR general obligations bonds and other public authority debt. The additional Cofina debt may be needed for short-term borrowing done through private placements.

What’s with Puerto Rico GDB bonds?

By Cate Long
September 25, 2013

 

The bonds of Puerto Rico’s fiscal agent, the Government Development Bank, are inexplicably blowing up today. After a trader alerted me to the sell-off I haven’t been able to find any public information that would explain why.

Puerto Rico’s borrowing goes private

By Cate Long
September 5, 2013

Barron’s ran a cover story last week and more articles followed in the financial press about the economic disabilities of Puerto Rico. These disabilities have been fueling a sell-off of the commonwealth’s public debt. Here is a chart showing the spread (or extra yield) that Puerto Rico bonds have had over the last three months:

Puerto Rico issues bonds for energy

By Cate Long
July 30, 2013

Though it has not borrowed in the bond market this year, the Commonwealth of Puerto Rico appears to have started by taking two loans from unnamed banks. Unfortunately we don’t have much information about these transactions, so the amount and purpose are unclear (July 9, July 29). The Puerto Rico Electric Power Authority (PREPA) has filed a bond offering that is expected to come to market on August 5th. Janney Montgomery’s Alan Schankel wrote about the deal:

Who is the Development Bank of Puerto Rico’s rumored next president?

By Cate Long
July 17, 2013

In the latest sign of Puerto Rico’s perilous financial footing, The Bond Buyer reported that the president of the Government Development Bank of Puerto Rico, Javier Ferrer, announced his resignation on Wednesday.

Puerto Rico tweets about bankruptcy

By Cate Long
June 21, 2013

The twitter handle for Puerto Rico’s executive branch is @fortalezapr. Here are some of the tweets from Thursday:

Is the U.S. Treasury bailing out Puerto Rico?

By Cate Long
June 17, 2013

Puerto Rico budget negotiations for fiscal 2014 are in the final stretch for the year’s July 1 start date. A massive $1.5 billion difference between spending and revenues must be closed. Discussion has included expanding the commonwealth’s sales tax to services and transactions between businesses. Local businesses fought hard against this proposal, and eventually, Governor Garcia Padilla switched focus. Reuters explains: