Puerto Rico: Hedge funds <3 the new bonds

Trading on hope, with junk:
Investors Flip for Puerto Rico’s Debt Offering
Hedge Funds Among Leading Buyers of Island’s $3.5 Billion Muni Deal

The smarter flipped theirs,

Then, as prices of the new bonds soared Wednesday, many investors sold at least some of their Puerto Rico debt for a quick profit. Investors and traders said buyers who got a piece of the bond sale Tuesday pocketed millions of dollars, echoing the quick winnings seen in last September’s largest-ever corporate-bond sale, a $49 billion offering by Verizon Communications Inc.

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And keep in mind,

The three major U.S. credit-rating firms this year downgraded the island’s debt to junk, or noninvestment grade, in a sign of lingering concern over its economy and governance.

Hate to be a party-pooper, but with numbers like that, someone’s going to get burned.

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