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Puerto Rico shares a story similar to Greece’s (GREK) in terms of its dismal economic performance and exacerbated debt issues.
Despite its bankruptcy filing, Puerto Rico has the option to negotiate with its creditors outside the court. It could go through a process equivalent to a Chapter 9 bankruptcy filing.
The board overseeing Puerto Rico (PZT) (HYMB) filed for bankruptcy protection in a much-anticipated move in 2017.
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Treasuries recorded a spike in their yields last year due to the sell-off after Donald Trump’s victory.
Likewise, while municipal bonds have outperformed the S&P 500 Index and bonds with comparable ratings, Puerto Rico munis have under performed in comparison.
Public corporations account for about 40% of the total outstanding debt of Puerto Rico.