TEL AVIV, Oct 14 (Reuters) - Andrew Herenstein, chief investment officer at Monarch Alternative Capital, said on Wednesday he recommends investors buy Puerto Rico’s municipal bonds since they pay high yields and have little risk of default.
Speaking at the Sohn Investment Conference in Tel Aviv, Herenstein noted that while Puerto Rico has very high debt, its fiscal situation was not as bad as that of even the worst U.S. states and cities that pay yields half that of Puerto Rico.
Puerto Rican 20-year bonds pay yields of 11.3 percent, versus Illinois at 4.38 percent and New York at 3 percent, he noted.
“Puerto Rico will fix itself,” Herenstein said. “There is a tremendous opportunity for Puerto Rican bonds to compress and move to levels of other bonds.” (Reporting by Steven Scheer and Tova Cohen; Editing by Alison Williams)