The municipal market will see more than $2.3 billion of new Puerto Rico debt by the end of 2008, including a $500 million deal backed by a new credit-revenue stream of delinquent taxes.

The $500 million offering will be a new credit for the commonwealth, leveraging $2.9 billion of unpaid income and corporate tax receipts that officials anticipate obtaining through an improved collection system. Bonding on that revenue stream could total $1 billion overall and officials are working on issuing the first $500 million offering before the end of the calendar year, according to Jorge Irizarry, president of the Government Development Bank for Puerto Rico, the island's financial adviser.

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