domingo, 15 de noviembre de 2009

Puerto Rico Bonds Beat US States as Fortuno cuts

Buen articulo...lo que la prensa izquierdozzza de Puerto Rico no comenta......

Puerto Rico Bonds Beat U.S. States as Fortuno Cuts (Update1)

By Jerry Hart

Nov. 13 (Bloomberg) -- Governor Luis Fortuno’s declaration of a fiscal emergency hasn’t deterred investors from buying Puerto Rico’s bonds, whose 20 percent return this year beat debt indexes in every U.S. state tracked by Standard & Poor’s.

Keeping investors interested in the Commonwealth’s $47 billion of debt may depend on the Republican governor’s plan to cut a $3.2 billion budget deficit, revive an economy that shrank 5.5 percent in the last fiscal year and rescue a credit rating one level from high-risk, high-yield junk. Since taking office in January, Fortuno eliminated 22,500 government jobs, riling a constituency that makes up 30 percent of the labor force.

“I’m not here to win a popularity contest,” Fortuno, 49, said by telephone from San Juan during a national strike on Oct. 15, when protesters and police clashed outside the Fortress, his home in the old section of the walled capital founded by Spain in 1521. “I’m here to deliver results.”

Bonds of Puerto Rico, which was ceded to the U.S. in 1898 after the Spanish-American War, are exempt from taxes in any state, unlike most municipal debt. The securities have benefited from record cash flows into municipal-bond funds, masking an economy that contracted in the 12 months ended June 30 at twice the 2.4 percent forecast for the country as a whole in 2009, the median estimate of analysts in a Bloomberg survey.

‘Too Few Bonds’

“I’m happy to have them because there’s a lot of cash chasing too few bonds,” said Michael Walls, who manages the $533 million Municipal High Income Fund at Waddell & Reed Financial Inc. in Overland Park, Kansas. “The more dicey a credit is, the more it’s rallied.” His fund owns Puerto Rico securities backed by sales taxes.

The difference in yield between a 6.5 percent Puerto Rico sales-tax bond sold in June, rated A+ by S&P, and a Municipal Market Advisors’ index of 30-year AAA rated municipal securities narrowed to 45 basis points on Nov. 9 from 100 on Aug. 28, as investors drove prices of the Commonwealth’s securities up and interest rates down more than higher-rated debt. A basis point is one one-hundredth of a percentage point.

The Commonwealth’s debt, including the sales-tax-backed and general-obligation securities rated BBB- by S&P, one step from non-investment grade, returned 20.1 percent this year through yesterday, according to the S&P Puerto Rico Municipal Bond Index. That’s a bigger gain than any of S&P’s 27 state indexes and compares with the 13.3 percent return for the S&P/Investortools Municipal Bond Main Index of all municipal debt, which rose 13.3 percent. S&P’s high-yield muni index increased 33.2 percent.

$55 Billion

A 5.75 percent Puerto Rico general-obligation bond due in 2038 that was priced earlier this month at a discount of 96.59 to yield 6 percent rose as high as 101.35 in the when-issued market to yield 5.57 percent, according to data compiled by Bloomberg. They were offered at 5.9 percent yesterday.

Debt of the Caribbean island, whose population of 4 million is about equal to Kentucky’s, is riding a rally in which investors poured a record $55 billion into municipal-bond mutual funds this year, according to the Investment Company Institute in Washington, D.C.

Fortuno’s so-called fiscal stabilization plan will have to show results soon to sustain the gains investors have recorded, said Matt Fabian, managing director at Municipal Market Advisors, a researcher in Concord, Massachusetts.

“You have a major implementation risk involving how well the plan will do,” Fabian said in an interview. “It’s not a credit that’s out of the woods yet.”

Fortuno, who earned a law degree from the University of Virginia, served as Puerto Rico’s non-voting delegate to the U.S. House of Representatives in Washington before winning the governorship a year ago with 53 percent of the votes.

Shrinking Payroll

He declared a fiscal emergency in March with a plan to curtail public spending, which has boosted borrowing to 83 percent of economic output, according to S&P. That is four times more than Massachusetts, which has more debt as a portion of GDP than any state, with 20 percent in 2007, according to the Tax Foundation, a Washington, D.C.-based research organization.

Fortuno wants $2 billion of spending cuts, mostly through reductions in the Commonwealth’s payroll. He proposed deploying $6 billion of federal stimulus funds and $500 million from his government to employ fired workers on infrastructure projects while trying to lure private companies to maintain employment.

“We’re throwing almost $7 billion out there in the next few months, which is major for our size,” Fortuno said in an interview when he announced the effort.

Stabilization Fund

The governor’s fiscal plan will raise Puerto Rico’s jobless rate by 2 percentage points, said the Government Development Bank, the commonwealth’s borrowing agent. Unemployment was 16.2 percent in September, the highest since May 2006 and more than any state.

To support fired workers’ transition into private employment, Fortuno’s plan includes a $2.5 billion stabilization fund financed by sales-tax-backed bonds sold by the development bank. Carlos Garcia, president of the San Juan-based institution, said $1.5 billion for the fund was raised from a $5.3 billion series of bonds announced in June.

In the interview last month, Fortuno invoked memories of 2006, when government offices shut for more than two weeks until lawmakers negotiated a bailout from the development bank to plug a revenue shortfall.

“We don’t have a choice,” Fortuno said. “I’m not going to allow this place to close down like it did once.”

June Target

While Fortuno demands spending reductions, tax revenue is falling in the self-governing Commonwealth, whose residents pay only local income and sales taxes and no federal income levies. Collections dropped 5 percent in August from a year earlier, the eighth decline in 12 months, according to the development bank.

With unemployment rising and revenue declining, Fortuno suspended government job cuts short of his original target of 30,000, he said in an interview on Oct. 22 at a conference in Fajardo, 30 miles (49 kilometers) east of San Juan. Only $1.2 billion of the governor’s proposed spending reductions have been implemented, with the balance planned by the time the current fiscal year ends next June, the development bank said on Oct. 2.

Such delays aren’t surprising, said Horacio Aldrete- Sanchez, a Dallas-based S&P analyst.

“Balanced budgets won’t be achieved right away,” he said in an interview. “We always assumed it will take several years to achieve fiscal balance.”

Pharmaceutical Jobs

The island’s transformation from agriculture to one where manufacturing provided 46 percent of income in 2002 has stalled because of the global recession and the end of U.S. tax incentives that created 100,000 pharmaceutical jobs in the 1990s, said Miguel Soto-Class, executive director of the Center for the New Economy in San Juan, a private researcher.

More local enterprise is needed, especially tourism, which comprises 7 percent of the economy, he said.

“We consume things we don’t make with money that’s not ours, and you can’t grow an economy that way,” Soto-Class said. “We need a top-to-bottom reinvention of the taxing system to widen the tax base and lower rates.”

The development bank’s Economic Activity Index, which measures employment, cement sales, electricity and gas consumption, rose 0.8 percent in September from the previous month, the biggest gain since October 2006, the institution said Nov. 2. Still, investors are looking more toward reductions in the budget gap, spending and debt.

“The governor has said some strong things about how they’re going to reduce the deficit,” said Doug Nelson, a credit analyst at Waddell & Reed. “I’d like to believe him, but when you look at the history of Puerto Rico, they’ve had a lot of financial difficulties over the years.”

To contact the reporter on this story: Jerry Hart in Miami at

59 comentarios:

David dijo...

Qué prensa de izquierdas??!!! Claridad no es ni un diario. No sera que te refieres a El Nuevo Día, ese "gran" periodico?

David dijo...

Ah hermano y lo de Manu Chao como extremista de izquierda queda mas bien flojo, claro a menos que compartas gustos con Alfa 66. Y mira que en Cuba las cosas tienen que cambiar!

Anónimo dijo...

Good day, sun shines!
There have been times of hardship when I felt unhappy missing knowledge about opportunities of getting high yields on investments. I was a dump and downright stupid person.
I have never imagined that there weren't any need in large initial investment.
Nowadays, I'm happy and lucky , I begin to get real money.
It gets down to select a correct companion who uses your money in a right way - that is incorporate it in real deals, parts and divides the income with me.

You may get interested, if there are such firms? I'm obliged to answer the truth, YES, there are. Please get to know about one of them: [url=]Online Investment Blog[/url]

Anónimo dijo...

Companies House Webcheck
Webcheck Companies House
Company House Webcheck
Companies House Webcheck Service

[url=]companies house webcheck[/url]

nicol dijo...

Antes de nada, perdona que te escriba esto como un comentario, pero es que no vi tu email en el tu blog
Soy el webmaster de

Publizida BLOG'S es un ranking / directorio de clasificación de blogs en español, creado con el único propósito de dar a conocer los mejores blog's

Registrando su blog en Publizida BLOG'S accederás al servicio de estadísticas gratuitas y podrás participar en el TOP.RANKING
También puedes acceder a la valoración que los usuarios hacen de su página.

Y lo mas importante...
darte a conocer y aumentar el numero de visitantes a tu BLOG de manera totalmente gratuita.

Si te interesa puedes darte de alta

o visitanos en ......



Muchas Gracias por tu tiempo... y disculpa si no fue la mejor manera de darme a conocer.

Un saludo.

Anónimo dijo...

What's up, just wanted to tell you, I enjoyed this blog post. It was funny. Keep on posting!

Look at my homepage; how much should i weigh for my height

Anónimo dijo...

It's difficult to find well-informed people for this subject, but you sound like you know what you're talking about!

Feel free to visit my blog ... how to file bankruptcy in florida

Anónimo dijo...

Pretty section of content. I just stumbled upon your weblog and
in accession capital to assert that I get actually enjoyed account
your blog posts. Anyway I'll be subscribing to your feeds and even I achievement you access consistently fast.

My site :: Diets that Work

Anónimo dijo...

Hey! Would you mind if I share your blog
with my facebook group? There's a lot of folks that I think would really appreciate your content. Please let me know. Cheers

My web-site calories burned walking calculator

Anónimo dijo...

If you desire to grow your knowledge simply keep visiting this site and be updated
with the most up-to-date news posted here.

Feel free to surf to my blog how many calories do you burn walking

Anónimo dijo...

Valuable info. Lucky me I discovered your site accidentally,
and I'm stunned why this coincidence didn't came
about earlier! I bookmarked it.

my page diets that work

Anónimo dijo...

Hey There. I found your blog using msn. This is a very well written article.
I'll be sure to bookmark it and return to read more of your useful info. Thanks for the post. I'll definitely comeback.

Also visit my web site ... diets that work

Anónimo dijo...

Hello, I check your new stuff daily. Your writing style is witty,
keep up the good work!

my web-site :: diets that work fast

Anónimo dijo...

Just desire to say your article is as surprising.
The clarity in your post is simply great and i could assume you are an expert on this subject.
Fine with your permission let me to grab your feed to keep up to date with forthcoming post.
Thanks a million and please carry on the enjoyable work.

Also visit my blog ... airplane simulation games

Anónimo dijo...

I'm really enjoying the theme/design of your web site. Do you ever run into any web browser compatibility issues? A few of my blog audience have complained about my site not operating correctly in Explorer but looks great in Firefox. Do you have any recommendations to help fix this problem?

Here is my web page microsoft registry cleaner

Anónimo dijo...

I constantly emailed this blog post page to all my associates,
since if like to read it next my contacts will too.

Here is my weblog diet plans for women to lose weight fast for free

Anónimo dijo...

Howdy! I know this is kinda off topic however , I'd figured I'd ask.

Would you be interested in exchanging links or maybe guest authoring a blog article
or vice-versa? My blog discusses a lot of the same subjects
as yours and I feel we could greatly benefit from each other.
If you are interested feel free to shoot me an email.
I look forward to hearing from you! Great blog by the way!

Look at my weblog :: best diet plans for women

Anónimo dijo...

Good way of explaining, and nice paragraph to obtain information about my presentation focus, which i am going to
deliver in college.

Also visit my website - registry cleaner

Anónimo dijo...

Hello There. I found your blog using msn. This is a very well written article.
I'll be sure to bookmark it and return to read more of your useful information. Thanks for the post. I will definitely return.

my homepage :: best registry cleaner

Anónimo dijo...

I don't know whether it's just me or if everybody else experiencing issues with your
blog. It appears as though some of the text in your posts
are running off the screen. Can someone else please provide feedback and let me know if this is happening to them too?
This could be a issue with my web browser because I've had this happen before. Cheers

Look into my web site: bmi for women chart

Anónimo dijo...

I’m not that much of a internet reader to be honest but your sites really nice,
keep it up! I'll go ahead and bookmark your website to come back later. Many thanks

Feel free to surf to my homepage diet plans for women

Anónimo dijo...

My brother suggested I might like this blog. He was entirely
right. This post actually made my day. You cann't imagine simply how much time I had spent for this info! Thanks!

Feel free to visit my web page diet plan

Anónimo dijo...

I am genuinely thankful to the owner of this web page who has shared this great
piece of writing at at this time.

Here is my web-site: best diet plans for women

Anónimo dijo...

I blog quite often and I genuinely appreciate your information.
The article has truly peaked my interest. I am going to take a note of your site and
keep checking for new information about once a week.

I subscribed to your RSS feed as well.

my page easy diets that work

Anónimo dijo...

Everyone loves what you guys are usually up too.
This type of clever work and coverage! Keep
up the excellent works guys I've added you guys to blogroll.

Here is my website ... tips on how to lose weight fast

Anónimo dijo...

Today, while I was at work, my sister stole my iPad and
tested to see if it can survive a thirty foot
drop, just so she can be a youtube sensation. My apple ipad is now broken and
she has 83 views. I know this is completely off topic but I had to
share it with someone!

Feel free to visit my website: online graduate certificate

Anónimo dijo...

What's up mates, how is everything, and what you desire to say concerning this paragraph, in my view its truly remarkable in support of me.

Here is my web blog - graduate certificate programs

Anónimo dijo...

hey there and thank you for your information – I've definitely picked up anything new from right here. I did however expertise some technical points using this website, since I experienced to reload the web site lots of times previous to I could get it to load correctly. I had been wondering if your web host is OK? Not that I am complaining, but slow loading instances times will sometimes affect your placement in google and can damage your quality score if ads and marketing with Adwords. Anyway I'm
adding this RSS to my email and could look out for much more of your respective fascinating content.
Ensure that you update this again very soon.

Look into my web blog: diet plan for women

Anónimo dijo...

I could not resist commenting. Exceptionally well written!

Also visit my homepage ... safe diet plans

Anónimo dijo...

I am truly thankful to the holder of this
web site who has shared this wonderful article at at this time.

My weblog - diets that work for women

Anónimo dijo...

Great blog right here! Additionally your web site loads up fast!
What host are you the usage of? Can I am getting your associate hyperlink to your host?
I want my website loaded up as quickly as yours

Also visit my homepage diet plans that work

Anónimo dijo...

You can definitely see your expertise within the work you write.
The world hopes for more passionate writers like you who aren't afraid to mention how they believe. All the time go after your heart.

Check out my web-site: how much should i weigh chart

Anónimo dijo...

Hi there colleagues, fastidious article and nice arguments commented at this place, I am genuinely enjoying by these.

Stop by my page; ketone diet

Anónimo dijo...

Wonderful, what a webpage it is! This web site provides useful information to us,
keep it up.

my web page :: raspberry ketone diet reviews

Anónimo dijo...

It's remarkable to pay a visit this web site and reading the views of all colleagues on the topic of this paragraph, while I am also keen of getting familiarity.

Have a look at my site; metabolic rate calculator

Anónimo dijo...

I don't even know how I ended up here, but I thought this post was great. I don't know who
you are but definitely you are going to a famous blogger if
you aren't already ;) Cheers!

my blog ... graduate certificates online

Anónimo dijo...

Hi, I do believe this is a great site. I stumbledupon
it ;) I am going to revisit once again since i have book marked it.

Money and freedom is the best way to change, may you be rich
and continue to help others.

My site bankruptcy attorney florida

Anónimo dijo...

Your way of telling the whole thing in this post is in fact
fastidious, every one be capable of easily know it, Thanks
a lot.

my homepage; bankruptcy Florida

Anónimo dijo...

Hello, There's no doubt that your site could possibly be having internet browser compatibility issues. Whenever I take a look at your web site in Safari, it looks fine however when opening in Internet Explorer, it has some overlapping issues. I merely wanted to provide you with a quick heads up! Apart from that, excellent website!

my homepage :: bankruptcy laws in florida

Anónimo dijo...

Great blog here! Also your website loads up fast! What web host are you using?
Can I get your affiliate link to your host? I wish my site
loaded up as quickly as yours lol

Take a look at my page :: Diets That really work

Anónimo dijo...

Awesome blog you have here but I was wondering if you knew of any discussion boards that cover the same topics talked
about in this article? I'd really love to be a part of community where I can get advice from other experienced people that share the same interest. If you have any suggestions, please let me know. Appreciate it!

Feel free to visit my blog post diets that work fast for women

Anónimo dijo...

I believe that is among the most significant information for me.
And i'm satisfied studying your article. However want to statement on few general issues, The website style is great, the articles is truly excellent : D. Just right process, cheers

Feel free to surf to my web blog; how much should i weigh for my height

Anónimo dijo...

I'm not sure exactly why but this blog is loading very slow for me. Is anyone else having this problem or is it a issue on my end? I'll check back later on and see if the problem still exists.

Feel free to visit my web blog ... how much should you weigh

Anónimo dijo...

This is very interesting, You are a very skilled blogger.

I have joined your rss feed and sit up for in quest of more
of your great post. Additionally, I have shared your site in my social networks

Look at my web blog; resting metabolic Rate calculator

Anónimo dijo...

Hurrah, that's what I was searching for, what a information! present here at this weblog, thanks admin of this website.

Visit my weblog ... diets that work

Anónimo dijo...

I am extremely inspired together with your writing abilities and also with the format in
your weblog. Is this a paid theme or did you modify it yourself?
Either way keep up the excellent high quality writing, it is uncommon to look a great blog like this one nowadays.

Feel free to surf to my weblog; diets that work

Anónimo dijo...

whoah this blog is great i love studying your articles.
Stay up the great work! You recognize, many people are searching around
for this information, you can help them greatly.

my web page: metabolic rate calculator

Anónimo dijo...

Hello, i think that i saw you visited my weblog so i came to “return
the favor”.I'm trying to find things to enhance my web site!I suppose its ok to use some of your ideas!!

Here is my web blog - bmr calculator

Anónimo dijo...

wonderful issues altogether, you just received a new reader.
What would you recommend about your post that you made a few days in
the past? Any sure?

My weblog :: hip to waist ratio

Anónimo dijo...

This text is worth everyone's attention. Where can I find out more?

Here is my site :: diets that work fast

Anónimo dijo...

always i used to read smaller articles that also clear their
motive, and that is also happening with this piece of writing which I am reading now.

Also visit my weblog - raspberry ketone Diet reviews

Anónimo dijo...

Hiya! I know this is kinda off topic but I'd figured I'd ask.
Would you be interested in trading links or maybe guest authoring a
blog article or vice-versa? My website covers
a lot of the same subjects as yours and I believe we could greatly benefit from each other.
If you are interested feel free to send me an e-mail. I look forward to hearing from you!
Great blog by the way!

My weblog ... diet that works

Anónimo dijo...

Unquestionably believe that which you said. Your favourite reason seemed to be at the web the easiest
thing to keep in mind of. I say to you, I definitely get annoyed even as other
people think about issues that they plainly do not know about.

You controlled to hit the nail upon the highest as well as outlined
out the whole thing with no need side effect , people could
take a signal. Will likely be again to get more. Thanks

My weblog :: safe diets

Anónimo dijo...

So that means the camera only activates when you're using an app that needs it, such as with a Skype video chat. The applications that have been mentioned are readily compatible with nexus 7 device and these apps provide effective health advice. You've got a dual core 1 GHz Tegra 2 processor, 1 GB of RAM,
a 4 inch touch screen display with a resolution of 950 x 540 pixels and a 5 MP camera with 720p video capture.

Anónimo dijo...

Hello just wanted to give you a quick heads up and let you know a few of the pictures aren't loading correctly. I'm not sure
why but I think its a linking issue. I've tried it in two different internet browsers and both show the same outcome.

Also visit my web site - diets that really work

Anónimo dijo...

This is my first time pay a quick visit at here and i am in fact pleassant to read all
at alone place.

My homepage ... fat free diet

Anónimo dijo...

That, plus the added benefits and customization abilities that come with your own wordpress blog for example, makes the paid option a no-brainer for
anyone that can afford it. Different plugins
are controlled in different ways. Occasionally, bloggers may decide to disable the comments section on
their Word - Press blogs.

My web site :: WP Social Press

Anónimo dijo...

These alternatives may be enjoyable, however they are also
element of your YoVille tactic. Associated with the repeated drops of blossoms that one may
accumulate. Let's have a glimpse at the things they are.

Feel free to surf to my web site - saints row 3 cheats exploding bullets

Anónimo dijo...

Great post. I was checking constantly this blog and I am impressed!
Very useful information specially the last part :) I care
for such information a lot. I was seeking this particular information for a long
time. Thank you and good luck.

My page: skin care treatments