News Column

Fitch: Clarification Issued on Puerto Rican Investor Mix

August 18, 2014



NEW YORK--(BUSINESS WIRE)-- On Aug. 13, 2014, Fitch Ratings published commentary and research titled 'Big Changes for Puerto Rico Bond Market (Shift to New Investors Creates Bifurcated Trades)'. The report has been updated to provide certain clarifications.

Specifically, Fitch has obtained additional information on the exposures held by certain investor segments and carried bond insurance. To reflect this, adjustments were made, where appropriate, to show the holdings of long dated Puerto Rico zero coupon bonds on the basis of current market values rather than par value and insured bonds on the basis of par amount as opposed to par and interest. The adjusted values are lower, in line with the long-dated maturity of the instruments, and are a more appropriate reflection of the true exposure and value at risk, in Fitch's opinion.

Using current market values for zero coupon bonds, where available, total open-end U.S. municipal mutual fund ownership was approximately $20 billion, or 30% of the $65.1 billionPuerto Rico bond market. Holdings by Oppenheimer and Franklin funds, were $7.1 billion and $4.6 billion, respectively, using market values for zero coupon bonds (together 18% of the market), down from a combined $23 billion or 35% when using final maturity par value.

Using net par value, the amount of Puerto Rico bonds that benefited from monoline bond insurance was $15.2 billion, or 23% of the $65.1 billionPuerto Rico bond market. This is down from $23 billion or 35% of the market when calculated using par and interest.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: Big Changes for Puerto Rico Bond Market (Shift to New Investors Creates Bifurcated Trades) -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=761447

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Yuriy Layvand, CFA

Director

+1 212-908-9191

Fitch Ratings, Inc.

33 Whitehall St.

New York, NY 10001

or

Media Relations, New York

Brian Bertsch, +1 212-908-0549

brian.bertsch@fitchratings.com

Source: Fitch Ratings


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