The Puerto Rico Disaster

Over the years we’ve repeatedly seen municipal bankruptcies, the state of Illinois virtually broke, and Puerto Rico’s finances under control of an outside board. All these events have one common factor: cities, states, and now one territory that have been run by the Democratic party. Truly the party of financial irresponsibility. Continue Reading →

Puerto Rico Got Away With It

These bonds are CUSIP 74514LE86. The bonds are Puerto Rico Commonwealth Series A maturing July 1, 2035. Take a deep breath. Those are 20 year bonds. The Commonwealth unloaded $3.5 billion of these with a hefty 8 percent coupon according to EMMA. But, as we all know, a bond is nothing more than a promise to make one or more future payments on specified dates. The quality of that promise is reflected in the yield to maturity, not the coupon yield. Continue Reading →