Puerto Rico’s Default Plan May Spread Pain Beyond Utility
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The U.S. municipal-bond market begins the week wondering whether the Puerto Rico Electric Power Authority, the commonwealth’s sole provider of electricity, will pay bondholders tomorrow after lawmakers last week enacted debt-restructuring legislation.
If the utility known as Prepa fails to act, the blow would be the latest absorbed by investors buffeted by bankruptcies in Jefferson County, Alabama, and Detroit. The defaults call into question the underpinnings of the $3.7 trillion market.