Seeking Alpha

Puerto Rico comparable to NYC in 1976

  • "The potential impact of Puerto Rico on the municipal market is difficult to overstate," writes Jeff Westergaard at Morningstar, which views events there as the most important since the near-meltdown of NYC in 1976.
  • Unlike Detroit, Puerto Rican debt is widely held due to its "double-tax-free" benefit, and many individuals in high-tax states hold the paper individually or in funds. Also, the amount of Puerto Rican debt out there is several multiples of that of Detroit.
  • As a territory Puerto Rico cannot take advantage of Chapter 9 - "without engaging in speculation, it is safe to say that all muni market participants have a vested interest in a positive outcome for the commonwealth."
  • Muni ETFs: MUB, SUB, MUNI, PVI, PZA, SHM, TFI, VRD, HYD, ITM, MLN, PRB, SMB, GMMB, SMMU, RVNU, NY.
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