Fitch: Shifting Investor Mix Bifurcates Puerto Rican Bond Market

miércoles 13 de agosto de 2014 11:34 GYT

(The following statement was released by the rating agency) NEW YORK, August 13 (Fitch) The number of hedge funds trading Puerto Rico (PR) bonds is increasing, although exposure to specific credits has become bifurcated by whether they support or oppose the new Public Corporation Debt and Enforcement Recovery Act, according to a new report from Fitch Ratings. Fitch estimates there are now over 60 alternative fund managers holding more than $16 billion of the island's debt in aggregate. Some of these fund managers support the Recovery Act in order to ring-fence commonwealth obligations from PR public corporations while others are suing to annul it. On the traditional side, total U.S. mutual fund ownership of PR bonds has declined to 52% of the $65.1 billion market. But the remainder is concentrated among two large U.S. fund managers who together hold more than $23 billion of PR bonds. On contrast, Fitch-rated U.S. closed-end funds across 14 other fund managers have reduced their PR holdings on average by 65% since summer of 2013. Remaining exposure is being held in sales tax and general obligation issuers, half of which is insured. Fitch estimates that over $23 billion, or 36% of the $65.1 billion Puerto Rico bond market currently carries monoline credit protection, which provides a secondary source of repayment. Contact: Yuriy Layvand, CFA Director +1-212-908-9191 Fitch Ratings, Inc. 33 Whitehall St. New York, NY 10001 Ian Rasmussen Senior Director +1-212-908-0232 Kellie Geressy-Nilsen Senior Director FitchWire +1 212 908-9123 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004 Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: Additional information is available at ''. Applicable Criteria and Related Research: Big Changes for Puerto Rico Bond Market (Shift to New Investors Creates Bifurcated Trades) here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.