Bonds in Puerto Rico

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

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