Pacific Investment Management Co. and BlackRock Inc. say the entire $3.7 trillion municipal market is at risk should Puerto Rico lose its investment-grade status, even though many funds aren’t obliged to unload bonds cut to junk.
Puerto Rico may have its credit rating cut to junk in the fiscal year beginning July 1 as the commonwealth struggles with a shrinking economy, says Peter Hayes, head of municipal debt at New York-based BlackRock Inc.
Puerto Rico’s record-high yields are attracting investors who typically buy the riskiest municipal debt, in a sign of how dire the island’s finances have become as it prepares to borrow as much as $1.2 billion by year-end.
Grand Parkway Transportation Corp., which is building part of a 184-mile toll road encircling Houston, is readying the $3.7 trillion municipal-bond market’s biggest borrowing in more than a year even as the yield penalty on some Texas highway bonds has risen 28 percent since January.
Threats of conflict coming from North Korea have increased international scrutiny of untested young dictator Kim Jong Un, as the isolated nation announced today that it will restart a facility capable of expanding the regime’s nuclear arsenal.