While Puerto Rico experienced its largest default ever on Monday, fixed-income investors are treating the debt problems separately from the broader market.
“It was telegraphed,” John Miller, co-head of fixed income at Nuveen Asset Management, told Bloomberg. “It’s a continuation of an ongoing reality that they don’t have the revenues to meet all their budgetary expenses and pay debt service at the same time.”
Looking past the Puerto Rico woes, investors funneled $1.2 billion into muni funds for the week through April 27, the 30th straight week of asset growth and the largest of 2016. The inflows also came in after Moody’s Investor Service warned of the inevitable Puerto Rico default.
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