What Puerto Rico's Prepa Bankruptcy Means for Munis

The video discusses the recent court ruling on PREPA bonds, which significantly reduced bondholder claims, catching the market off guard. It explores the potential for bondholder appeals and the implications for financially challenged utilities. The discussion shifts to investment strategies in municipal bonds, highlighting the benefits of lengthening duration and the potential advantages of muni investments, including yield and tax benefits. The video concludes with insights into market trends and the impact of low muni issuance.

What was the initial agreement on the value of PREPA bonds before the court ruling?

• $0.50 on the dollar

• $0.70 on the dollar

• $0.30 on the dollar

• $1.00 on the dollar

How much was the bondholders' claim reduced to after the court ruling?

• $2.38 billion

• $3 billion

• $8.2 billion

• $5 billion

Why might bondholders consider appealing the court's decision?

• The bonds were overvalued initially.

• The market was stable.

• The bonds were undervalued initially.

• The reduction in claims was drastic.

What investment strategy is being considered by fixed income investors in the municipal space?

• Investing in stocks

• Avoiding munis

• Lengthening duration

• Shortening duration

What is one reason for the attractiveness of munis in the current market?

• High risk

• Low yield

• High issuance rates

• Tax advantages