Puerto Rico

Secondary rallying on Puerto Rico's new term bonds slowed Thursday morning after initial buyers took immediate profits and exited their positions.

With the long-awaited bond issuance by Puerto Rico in the rearview mirror, municipal bond buyers Wednesday had more than $4 billion of new bonds to purchase.

Puerto Rico Gov. Alejandro García Padilla says that Puerto Rico's $3.5 billion bond sale was a triumph and that he plans to work to balance the budget and revive the economy.

The yield on Puerto Rico bonds issued Tuesday in the island's $3.5 billion sale has fallen by 40 basis points in secondary trading.

Investors flocked to a $3.5 billion Puerto Rico general obligation deal Tuesday as hedge funds and institutional buyers snatched up the high-yield bonds. The deal, which marks the largest sale of junk bonds in municipal market history, gives the U.S. territory a chance to reroute its economy.

Several sizeable new bond issues Tuesday may not get the attention issuers hoped for as Puerto Rico's highly anticipated $3.5 billion bond sale grips the market.

Puerto Rico Gov. Alejandro García Padilla has formed a work group to suggest ideas to curb the island's untaxed informal economy, emigration and low labor participation rate.

Puerto Rico may offer bonds maturing in 2035 at a yield from 8.625% to 8.875%, according to preliminary pricing information obtained from underwriters working on the deal, which is set to finalize pricing Tuesday. The $3 billion of bonds come with a coupon of 8%, according to the document, obtained by The Bond Buyer.

Analysts are divided on whether Puerto Rico's unusually frank disclosures before its $3 billion bond issue scheduled for Tuesday will help or hurt the sale.

Puerto Rico plans to sell a $3 billion general obligation bond on Tuesday.