After shunning the U.S. territory for much of the past six years, municipal-bond mutual funds are again buying the Puerto Rico’s debt as it recovers from the 2017 hurricane and inches closer to winning a potential court approval to restructure more than $17 billion of sales-tax-backed debt, a major step in its record-setting bankruptcy, Bloomberg News reported. Pacific Investment Management Co. held about $506 million of commonwealth securities as of Sept. 30, nearly 10 times the $52 million held the month before Hurricane Maria, according to data compiled by Bloomberg. AllianceBernstein LP increased its exposure to $347 million, as of Nov. 30, up from $53 million in August 2017. Capital Group and Massachusetts Financial Services Co. increased their exposure by nearly 50 percent. The increase comes after the price of Puerto Rico bonds rallied on expectations that a stream of federal disaster aid and private insurance cash will give a jolt to Puerto Rico’s economy, which has shrunk in the past decade. Its bankruptcy may also speed up this year if a court signs off on the restructuring plan for its sales-tax bonds that would address about a fourth of the island’s $74 billion of debt, freeing Puerto Rico to strike similar deals with other creditors.
