For Puerto Rico allaying fears of default in the investor community has become almost as important as fixing its finances.

Because of these fears, over the last 15 months and particularly in the last two months market participants have been demanding increasing yields to hold Puerto Rico paper. This is despite the fact that muni analysts have largely applauded the steps taken by new Puerto Rico Gov. Alejandro García Padilla to address its persistent budget deficits and sagging pension system.

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