(Adds historical prices, context)
NEW YORK, April 11 Prices of Puerto Rico's newly
issued $3.5 billion debt sank in heavy trade late on Friday,
hitting the lowest price ever at the end of a week when the
indebted U.S. commonwealth hired additional teams of debt
Adding to concerns that the islands could be preparing to
restructure its debt, Puerto Rico's Government Development Bank,
the commonwealth's financing arm, on Thursday hired a third
company with restructuring expertise as it tries to balance its
budget while jump-starting a struggling economy.
"When the commonwealth retained restructuring teams, that
seemed to be a catalyst for selling to break the original issue
price," said Randy Smolik, senior analyst at Thomson Reuters
Municipal Market Data.
The debt traded at a low of around 86 cents
on the dollar, pushing the yield to 9.549 percent, according to
Municipal Market Data. Traded volume was over $178 million,
according to MMD.
The sale of the $3.5 billion junk-rated bonds on March 11
attracted scores of hedge funds eyeing fat yields and trading
gains. Analysts at the time said that could make trading in the
bonds unsually volatile for the sleepy muni market, where
buy-and-hold retail investors dominate and most debt rarely
Puerto Rico on Thursday hired West Palm Beach, Florida-based
FTI Consulting, a global advisory firm that includes
restructuring and turnaround experts. That followed the hiring
of Cleary Gottlieb Steen & Hamilton on Monday and Millco
Advisors LP last month.
Prices on Puerto Rico's debt started to move lower on Monday
after weeks spent hovering around the issue price of 93 cents.
Friday's selloff took the average price for the bonds to 88.176
cents, also a new low. That corresponded to a yield of 9.284
(Reporting by Edward Krudy; Additional reporting by Robin
Respaut; Editing by James Dalgleish, Meredith Mazzilli and