In a choice between a rock and a hard place, investors favor Puerto Rico over Detroit.

Trading in distressed credits from Puerto Rico remains active and prices are appreciating in the secondary market, even after the commonwealth was forced to cut back its bond program for the rest of the year after yields on its debt soared. At the same time, muni experts said, activity is extremely limited especially on uninsured bonds from Detroit, which faces a long and complicated recovery after filing July 18 for the largest municipal bankruptcy to date.

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