Scores of trades in bonds Puerto Rico issued this month have been canceled by dealers, including some that were under the $100,000 minimum transaction level stipulated in deal documents, data compiled by Bloomberg show.
Puerto Rico’s record $3.5 billion debt sale was structured to keep out individual investors with less than $100,000 to spend. Those buyers have found a way in, lured by the biggest rally in high-yield municipal bonds in five years.
The biggest rally in high-yield municipal debt in five years is luring individuals to Puerto Rico’s $3.5 billion deal, even as the commonwealth seeks to keep them away because the securities are so risky.
U.S. securities regulators proposed stricter rules on brokers in the $3.7 trillion municipal-debt market designed to prevent investors from being shortchanged when trading state and local government bonds.
The judge overseeing Detroit’s bankruptcy has rejected a $165 million settlement between the city and the banks that provided the city with interest-rate swaps. This startling development raises fundamental issues about the fairness of the original deals and the quality of the advice Detroit received before, during and after the transactions.