Puerto Rico Bonds Rally as Rival Creditors Float Settlement
- Senior sales-tax bonds soar to 71 cents on the dollar
- While plan rejected, it moves toward settling major conflict
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Puerto Rico bonds rallied after a group of investment firms and insurers reached agreement on a restructuring plan that would allow them to receive larger-than-expected recoveries on their defaulted debt, marking a first step toward resolving a key clash between creditors who have been fighting in bankruptcy court.
The gains, which pushed some securities up by as much as 22 percent Monday, came despite the plan’s rejection by Puerto Rico’s federal financial overseers, who said it would leave the government facing budget shortfalls for years and was put together without their input.