Puerto Rico’s benchmark bond surged to a 25-week high yesterday, its busiest trading day since October, after the bankrupt U.S. territory nearly doubled its projected five-year surplus to $6 billion as it recovers from Hurricane Maria, Reuters reported. While the price rise is being taken as a sign the market is beginning to see a recovery path for the storm-ravaged island, analysts remained wary, taking the spike with a grain of salt. General obligation bonds maturing in 2035 changed hands more than 100 times yesterday and traded as high as 45 cents on the dollar, the bond’s highest level since Oct. 3. While still down sharply from the 60-cent range the bonds had occupied before Maria struck on Sept. 20, prices are continuing a steady, month-long climb as the island’s recovery prospects improve. Senior bonds backed by sales tax revenue, so-called COFINA debt, have fared even better, reaching 63.51 cents in light trading on Monday, higher than they were in the weeks before the storm. The latest bounce came on the heels of a revised financial outlook released by Puerto Rico’s government on Friday that projected the U.S. territory to accumulate a $6 billion surplus over the next five years. An earlier version of the so-called fiscal turnaround plan, released in February, had forecast the surplus at $3.4 billion.
