Wed, Nov 25, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Puerto Rico ready to submit to hedge funds demands

Wednesday, February 19, 2014

Komfie Manalo, Opalesque Asia:

The Puerto Rican government appears to be inclined to give in to the demands of several hedge funds to waive its sovereign immunity to secure a fresh $3.5bn financing, reported the New York Post.

The deal will allow Puerto Rico to stave off, at least for two years, default on its $70bn debt, although experts said waiving its sovereign immunity would put the Commonwealth into a slippery slope.

Several hedge funds, including Dan Loeb’s Third Point, Fir Tree and Arrowgrass Capital Partners, hold Puerto Rico’s municipal debt bonds and have initiated a $3.5bn financial window to the Commonwealth to prevent it from defaulting. The deal carries an interest rate north of 10%. Third Point is not involved in the new deal.

Puerto Rico is nearing default of its debt after its municipal debt bond was downgraded to junk status by credit raters.

The Post quoted Greylock Capital CEO and veteran of sovereign restructurings Hans Humes as saying that waiving its sovereign immunity would further put Puerto Rico into a more difficult situation. He said the new financing would translate to an additional $350m in interest, on top of the debt Puerto Rico is now unable to pay. "Hedge funds are setting it up for default," Humes said.

Last week, the hedge funds participating in the planned bond offering ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - BlackRock targets ETF investors with flexible currency hedging, Nelson Peltz bets on General Electric Company and Mondelez International, Apple plummets to 4th place among hedge holdings, from No. 1, Top Q3 equity purchases and sales of top 50 hedge funds[more]

    BlackRock targets ETF investors with flexible currency hedging From BlackRock Inc., the world’s largest asset manager, is changing course on exchange-traded funds that protect against currency volatility. After stressing the easy switch between hedged and unhedged ET

  2. Chicago-based Achievement A. M. is shutting down hedge fund following losses[more]

    Komfie Manalo, Opalesque Asia for New Managers: Achievement Asset Management, a Chicago-based hedge fund firm, has announced it is closing down its hedge fund operation following losses on energy market bets this ye

  3. Lyxor Hedge Fund Index up 0.1% (+0.4% YTD) as global macro and CTAs outperform[more]

    Komfie Manalo, Opalesque Asia for New Managers: Global macro and CTAs outperformed the hedge fund space and delivered positive returns last week amidst difficult market conditions, with the Lyxor Hedge Fund Index up

  4. BlackRock is shutting down its Global Ascent macro fund[more]

    Komfie Manalo, Opalesque Asia: BlackRock, the world’s largest asset manager, has announced plans to shut down a macro fund, Global Ascent Fund, because of "headwinds facing the industry". The hedge fund, which makes bets on stock, bond and currency markets, will return money to investors. Ac

  5. Opalesque Roundtable: Seeding deal terms can be onerous for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Executives from fund of funds firms, family offices, a placement agent, a private equity firm, and an accounting firm gathered in Connecticut last month for the