Puerto Rico

Munis are a great place to invest right now. Imagine yielding more than 10 percent on AAA rated securities backed by the government. The first of these bonds that Bloomberg mentions are the Puerto Rico Tax Free AAA rated GOs. When I was working in Puerto Rico in 2006 they were in the midst of creating these securities. I was completely against the issuance of these bonds as the interest payments come from a sales tax that the government imposed. I am not a fan of taxes, much less a fan of taxes that will likely be in place until 2024 which is when the last of the bonds expire. The PR government has many problems and I won't go into much detail but for investors, these bonds are GREAT . There is an upcoming election in the island. If the candiate I want to win does (which will most likely will) it will mean even better things for Puerto Rico's economy.


Bloomberg

With the collapse of the $330 billion auction-rate debt market, a disaster for issuers and stranded bondholders, has made it possible for investors to earn 10 percent or more on top-rated securities.

Puerto Rico's tax-free AAA 2024 general obligation bonds are paying 12 percent, equivalent to an 18.5 percent yield on taxable issues. That compares with rates of 4.3 percent for 10-year U.S. Treasuries and 10.5 percent for corporate high- yield, high-risk debt, according to indexes compiled by Merrill Lynch & Co.