Hedge Funds Buy over $100M of Bonds in Puerto Rico
According to a list of buyers of the $3.5 billion deal, Och-Ziff Capital Management LLC, Fir Tree Partners, Perry Capital LLC and Brigade Capital Management each bought more than $100 million of the bonds in Puerto Rico.
The
list doesn't show whether the firms continue to hold the bonds, which
carried junk credit ratings, or whether they sold some or all of their
purchases afterward.
John
Paulson's Paulson & Co. also purchased more than $100 million of
the deal. It isn't clear whether Mr. Paulson owned Puerto Rico debt
before. His firm invested in a Puerto Rico hotel earlier this year.
Hedge
funds and other nontraditional buyers of municipal bonds bought around
70% of the deal when it was offered, according to calculations based on
the document—an atypically high level for municipal-bond offerings. Many
investors said they were drawn by the high yields and discounted price,
though market participants said another major draw for buyers was the
prospect of boosting the value of their existing investments in the
island.
Source: Wall Street Journal