As we start the New Year, Puerto Rico remains in focus for municipal investors. For Cofina bondholders, recent news has been mostly positive; the restructuring plan is on track to be finalized and the bankruptcy judge is expected to confirm the plan this week – marking a major milestone for the island. Meanwhile GO bondholders are seeing significant volatility. A joint legal motion was filed this week challenging the legality of certain GO bonds issued by the island. The motion was filed by the Financial Oversight and Management Board for the Commonwealth of Puerto Rico and the Official Committee of

Late Friday on October 19, the Financial Oversight and Management Board for Puerto Rico (the Board) filed a disclosure statement with the federal bankruptcy court. The filing, on behalf of COFINA, lays out the Board’s plan of adjusting the outstanding sales tax bonds. The 800+ page document provides additional details on the debt restructuring plan itself, including a list of all creditors that will be impacted. Under this plan, the security pledge and projected recoveries are expected to be unchanged from the original proposal. However, the structure was slightly modified with an increase in the allocation of capital appreciation bonds

Puerto Rico Sales Tax Bonds, better known as COFINAs, have been some of the best performing muni bonds in 2018, having risen in value by nearly 110% between January 2, 2018 and June 20, 2018[1]. This is quite a move for any financial security in less than 6 months, nonetheless a defaulted municipal bond. Still, this isn’t particularly surprising given the rally in many Puerto Rico names over that same time frame. Just look at the price graphs of some of the largest Puerto Rico issuers since January 1st: A rising tide lifts all boats as they say, and an