muscleman Posted December 12, 2013 Share Posted December 12, 2013 http://www.bloomberg.com/news/2013-12-12/puerto-rico-may-be-cut-to-junk-by-moody-s-as-economy-weakens.html I think this will become very interesting if the downgrade and forced selling happens. Puerto Rico doesn't seem to have an insolvency issue, but just a liquidity issue, so I think if they can bailed out by some cheap bridge financing, it will be good and the "crisis" will be over. I can't find that 2041 GO bond symbol in fidelity. Does anyone know? If the forced selling does happen and it goes much lower than 67, I would be quite interested. :) Link to comment Share on other sites More sharing options...
matjone Posted December 12, 2013 Share Posted December 12, 2013 I've got no idea but there was a blog I used to read called stableboy selections that did a few posts on puerto rican bonds. If I remember right he was of the opinion that the gov wouldn't be able to pay. Link to comment Share on other sites More sharing options...
muscleman Posted December 13, 2013 Author Share Posted December 13, 2013 I've got no idea but there was a blog I used to read called stableboy selections that did a few posts on puerto rican bonds. If I remember right he was of the opinion that the gov wouldn't be able to pay. I found a few posts there but I don't think those make any sense at all. There is no detail about his analysis and his view. Just a boy crying wolf. :) What I see is that Puerto Rico annual budget deficit has gone from 3.3 bn in 2009 to 0.8 bn in 2013, and continues to go down. Link to comment Share on other sites More sharing options...
matjone Posted December 13, 2013 Share Posted December 13, 2013 Yeah I have no idea on governent bonds. That's why I don't read the blog anymore - his stuff just isn't up my alley. I'd rather read simple writeups on straight up cheap stocks like PDRX. But I figured I might as well pass it along in case it meant something to you. Link to comment Share on other sites More sharing options...
Phaceliacapital Posted December 14, 2013 Share Posted December 14, 2013 Additional information: http://www.businessweek.com/articles/2013-10-31/puerto-ricos-borrowing-binge-could-rock-the-muni-bond-market I find it an interesting topic and will try to devote a couple of hours, thanks Link to comment Share on other sites More sharing options...
muscleman Posted December 14, 2013 Author Share Posted December 14, 2013 Additional information: http://www.businessweek.com/articles/2013-10-31/puerto-ricos-borrowing-binge-could-rock-the-muni-bond-market I find it an interesting topic and will try to devote a couple of hours, thanks Yeah. It is written in PR's constitution that public debt must be paid in full at first before other liabilities. So this means if there is really a need to restructure, pensions will likely get hurt before the GO bonds are even considered to get a cut. But if Moody downgrade does happen, there will be lots of forced selling, and price could become very cheap. :) Still, did anyone find that 2041 GO bond that bloomberg was talking about? I have no idea which bond it is. I can't find it in fidelity. Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 16, 2014 Share Posted January 16, 2014 Puerto Rico moves closer to default http://www.cnbc.com/id/101338909 Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 16, 2014 Share Posted January 16, 2014 Puerto Rico to Get Spotlight From Jones Day at Investor Meeting http://www.bloomberg.com/news/2014-01-16/puerto-rico-to-get-spotlight-from-jones-day-at-investor-meeting.html Link to comment Share on other sites More sharing options...
muscleman Posted January 16, 2014 Author Share Posted January 16, 2014 Puerto Rico to Get Spotlight From Jones Day at Investor Meeting http://www.bloomberg.com/news/2014-01-16/puerto-rico-to-get-spotlight-from-jones-day-at-investor-meeting.html I think Puerto Rico's situation is more like Italy and Spain, not Greece. They have done a good job, and it is working better than they expected. With that said, I welcome anyone who understand this issue to share their thoughts, and I really appreciate that. I remember in 2011, the issues about Italy and Spain about to die has been on the media all day long. Then all of a sudden, they no longer say anything about it anymore. What is the "crsis"? It is the boy who cried wolf meets the analysis who made a bearish call, hoping to gain some popularity. Link to comment Share on other sites More sharing options...
zippy1 Posted January 16, 2014 Share Posted January 16, 2014 Mark Palmer@ BTIG actually sent out a note yesterday about this. BTIG seems to think the Jones Day event is a "business developemtn" event at best. The article states that “creditors to Puerto Rico are meeting in New York on Thursday with lawyers and debt restructuring specialists as the territory appears increasingly likely to default on its $70bn in public sector debt and an additional $40bn of unfunded pension liabilities, these specialists say.” In our view, a meeting between Puerto Rico’s creditors with lawyers and debt restructuring specialists will have just as much impact on the likelihood that the Commonwealth will default as the Mets fans’ meeting with baseball writers would have on their prospects of winning the title: none. Read more: http://www.btigresearch.com/2014/01/15/mbia-assured-guaranty-ambac-ft-headline-on-puerto-rico-creditor-meeting-borders-on-journalistic-malpractice/#ixzz2qb9xx44K Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 22, 2014 Share Posted January 22, 2014 http://dealbook.nytimes.com/2014/01/21/2-billion-deal-in-works-for-puerto-rico/?ref=business $2 Billion Deal in Works for Puerto Rico Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 24, 2014 Share Posted January 24, 2014 Puerto Rico: Harbour of debt (FT)Puerto_Rico_-_Harbour_of_debt.pdf Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 5, 2014 Share Posted February 5, 2014 Puerto Rico Has Credit Rating Cut One Step to Junk by S&P http://www.bloomberg.com/news/2014-02-04/puerto-rico-has-credit-rating-cut-one-step-to-junk-level-by-s-p.html Link to comment Share on other sites More sharing options...
muscleman Posted February 5, 2014 Author Share Posted February 5, 2014 "In a letter to investors on Tuesday, Third Point, the hedge fund run by Daniel S. Loeb, said Puerto Rico bonds were among his firm’s top five losing investments in the fourth quarter." http://dealbook.nytimes.com/2014/01/21/2-billion-deal-in-works-for-puerto-rico/?_php=true&_type=blogs&ref=business&_r=0 So the major concerns are just liquidity. They don't have the solvency problem. Just like Italy and Spain debt problems in 2011. :) Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 5, 2014 Share Posted February 5, 2014 How are you investing? Through Popular bank? Are you buying bonds directly? Link to comment Share on other sites More sharing options...
muscleman Posted February 5, 2014 Author Share Posted February 5, 2014 How are you investing? Through Popular bank? Are you buying bonds directly? Dan Leob bought a bunch of bonds and he is underwater now. I think buying the bonds will be interesting, but I haven't bought any yet. I have MBI, AGO and BPOP that have exposure to this play, but I think it is ok to buy bonds. PR constitution says payments must go to bond holders first before going to other liabilities like pension. Not to say that there is only liquidity issue, not solvency issue. So I don't think a default will happen. Morgan Stanley put up a $2 bn refinancing package with 10% coupon. While the term is not great, it at least provides liquidity for the next few years, so there is no liquidity issue either. I think I would wait a bit longer before buying the bonds, because PR government will only take Morgan Stanley's offer at the last moment before Moody decide to downgrade them to junk. Before that, there will be some more scary news going on. Link to comment Share on other sites More sharing options...
muscleman Posted February 6, 2014 Author Share Posted February 6, 2014 How are you investing? Through Popular bank? Are you buying bonds directly? My bad.... S&P has already downgraded PR debt to junk, and there is limited selling, which means it should have already been the bottom right now. Link to comment Share on other sites More sharing options...
Ham Hockers Posted February 6, 2014 Share Posted February 6, 2014 http://www.nuveen.com/Home/Documents/Viewer.aspx?fileId=61768&utm_source=MarketCommentary&utm_medium=Twitter&utm_campaign=MarketCommentary Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 7, 2014 Share Posted February 7, 2014 Moody's Cuts Puerto Rico Ratings to Junk http://online.wsj.com/news/articles/SB10001424052702304680904579369040397229058?mod=WSJ_hp_LEFTWhatsNewsCollection Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 8, 2014 Share Posted February 8, 2014 Puerto Rico Seeks Approval of Up to $3.5 Billion in GO Bonds http://www.bloomberg.com/news/2014-02-08/puerto-rico-seeks-approval-of-up-to-3-5-billion-in-go-bonds-1-.html Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 11, 2014 Share Posted February 11, 2014 3/3 now. Fitch Cuts Puerto Rico’s Debt to Junk http://dealbook.nytimes.com/2014/02/11/fitch-cuts-puerto-ricos-debt-to-junk/?_php=true&_type=blogs&ref=international&_r=0 Link to comment Share on other sites More sharing options...
fareastwarriors Posted February 18, 2014 Share Posted February 18, 2014 Biggest Puerto Rico Owners See Rally After New Deal http://www.bloomberg.com/news/2014-02-18/biggest-puerto-rico-owners-see-rally-after-new-deal-muni-credit.html Link to comment Share on other sites More sharing options...
fareastwarriors Posted April 25, 2014 Share Posted April 25, 2014 John Paulson Calls Puerto Rico Singapore of Caribbean http://www.bloomberg.com/news/2014-04-24/john-paulson-says-puerto-rico-to-become-singapore-of-caribbean.html :P Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted April 25, 2014 Share Posted April 25, 2014 muscleman- not sure if you're still looking for this, but i did not see it: Puerto Rico Commonwealth PUB IMPT-SER A 5.750 Jul-01-2041 CUSIP 74514LYW1 I have to imagine that issue is referenced in articles often because it appears to have much better liquidity. Link to comment Share on other sites More sharing options...
muscleman Posted April 25, 2014 Author Share Posted April 25, 2014 muscleman- not sure if you're still looking for this, but i did not see it: Puerto Rico Commonwealth PUB IMPT-SER A 5.750 Jul-01-2041 CUSIP 74514LYW1 I have to imagine that issue is referenced in articles often because it appears to have much better liquidity. Why not call your broker? I am not long PR bonds because after the expected downgrade to junk, the bond did not sell off as I expected, which means it is bullish. I am long BPOP. :) Link to comment Share on other sites More sharing options...
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