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‘Question everything:’ Puerto Rico hits $3.8 trillion market

FEBRUARY 11, 2019 | by Amanda Albright | BLOOMBERG

America’s local governments frequently pledge a slice of their revenue to investors to make their bond deals more attractive by adding an extra layer of security. But Puerto Rico’s record-setting bankruptcy has cast that safety in doubt. … The Puerto Rico sales-tax bonds, known as Cofinas, are similar to those issued by Chicago’s Sales Tax Securitization Corp. … While those Chicago bonds have AAA ratings from Fitch Ratings and Kroll Bond Rating Agency, investors demanded yields … about 1.7 percentage points more than benchmark debt, nearly twice the premium investors demanded a year earlier.

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