NEW YORK, Feb 1 (Reuters) - Dan Fuss, vice chairman of Loomis Sayles, said on Monday that Puerto Rico’s offer to creditors to take a deep discount on their debt will unlikely be approved by investors but serves as a good start to restructuring discussions.
“The plan is not going to fly on the GOs (general obligation bonds) unless you offered the GOs a higher coupon for senior bonds,” Fuss said in an interview.
Loomis Sayles, which holds GOs in various portfolios, oversaw $229 billion as of Dec. 31, 2015.
Fuss said about the proposal: “This is a trial balloon. It’s an opening in the overall discussion.” Loomis Sayles will continue to hold the GOs because “we have a very nice yield, based on cost” paid on the securities, Fuss said. (Reporting by Jennifer Ablan; Editing by Jeffrey Benkoe)