Despite Puerto Rico's history of bond defaults over the last 10 years, the city of San Juan successfully sold $121 million of bonds.
RBC Capital Markets priced for San Juan, Puerto Rico, (Baa3//BBB+/) $121.05 million of GOs. The first tranche, $111.475 million of tax-exempt Series A bonds, saw 5s of 7/2027 at 3.28% (+35 basis points to Refinitiv MMD's Baa GO curve), 5s of 2031 at 3.65% (+25), 5s of 2036 at 4.20% (+18), 5.25s of 2041 at 4.60%, 5s of 2046 at 4.82% (+30) and 5s of 2051 at 4.90% (+22), callable 7/2036.
The second tranche, $9.575 million of taxable Series B bonds, saw 6s of 7/2031 price at par.
Francisco De Armas, co-founder and managing member of PRMF Fund LLC, said the tax-exempt portion was 18 times oversubscribed.
Underwriter RBC didn't immediately respond to a request for a comment.
"I am really happy overall with the transaction," not only as a buyer of some of the taxable bonds but as a Puerto Rico resident, De Armas said.
Kim Olsan, senior fixed income portfolio manager at NewSquare Capital said the success of
De Armas said his firm's investors largely reside in Puerto Rico and preferred the taxable bonds, since they don't pay federal taxes.
The Puerto Rico Fiscal Agency and Financial Advisory Authority said, "We believe the successful sale of the San Juan bonds indicates market recognition of the progress achieved on fiscal and financial matters by the municipality and overall market confidence on Puerto Rico's economy, financial situation and credits like PR general obligations, COFINA and Puerto Rico Aqueduct and Sewer Authority."
Since Tuesday there have been block sized trades on Puerto Rico bonds at substantially lower yields, FAFAA added.
The city of San Juan didn't immediately respond to a request for a comment.
