- A couple of news items out of Puerto Rico have BTIG's Mark Palmer suggesting a little pressure could come off the stocks of MBIA (MBI), Assured Guaranty (AGO), and Ambac (AMBC).
- First was last night's announcement Puerto Rico is considering offering $2B in debt in the coming weeks, suggesting the Commonwealth has come to terms with paying as much as a 10% interest rate - unsustainable in the long-term, of course, but Palmer says to consider the $2B "bridge financing" which takes default off the table for two years.
- This morning, Governor Alejandro Padilla announced he will introduce a balanced budget for the 2014-15 fiscal year in the coming weeks, ahead of a previous goal of 2016. The accelerated schedule, says Palmer, could address the concerns of ratings agencies itchy to downgrade Puerto Rico to junk, and it might allow something lower than a 10% coupon on the possible debt offering.
Puerto Rico suggests balanced budget sooner than expected
Feb 3 2014, 09:29 ET