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Puerto Rico Sales Tax Bond Fight Sparks Muni Market Anxiety

Law360 (April 20, 2018, 7:18 PM EDT) -- Municipal bond investors are paying close attention to what happens in a pending court fight over the validity of bondholder liens on Puerto Rican sales tax, experts say, warning of widespread consequences should investments thought to be bankruptcy-proof turn out otherwise.

In addition to wielding considerable control over how funds ultimately get distributed to Puerto Rico’s bondholder creditors, the judge presiding over the territory’s bankruptcy-like cases is also influencing the U.S. municipal finance market. Experts say that due to the infrequency of government bankruptcies, investors holding...
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