Sat, Aug 27, 2016
A A A
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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new