Puerto Rico bond sale may lure high-yield closed-end funds -Fitch
By Jessica DiNapoli
Aug 18 (Reuters) - Puerto Rico may attract high-yield municipal closed-end funds to its first sale in public markets since its governor said in June that the island's debt was unpayable, Fitch Ratings said on Tuesday ahead of the $750 million sale of water authority bonds.
Managers of high-yield closed-end funds may participate in this week's $750 million bond sale for the Puerto Rico Aqueduct and Sewer Authority (PRASA) because of the authority's stable prices compared to other debt issuers from the island, Fitch said.
A return of municipal closed-end fund managers to Puerto Rico would be a source of liquidity for the U.S. commonwealth, according to Fitch.
The PRASA bond sale follows a failure by Puerto Rico to make a full payment due on bonds sold by its Public Finance Corp. The partial payment was considered a default by its creditors and ratings agencies, the first by the U.S. territory.
Fitch Ratings on Monday rated Puerto Rico's planned bond sale 'CC', meaning that default of some kind appears probable, and that there are very high levels of credit risk.
Puerto Rico was scheduled on Monday to conclude its presentations to investors on the bond sale. The island had been conducting presentations since late last week. (Reporting by Jessica DiNapoli; Editing by Paul Simao)
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