FMSbonds, Inc.’s Municipal Bond Forum is an exclusive opportunity for investors to submit questions and comments on the bond market or to respond to one of our articles.
To participate, just send us an e-mail. Be sure to include your name or initials and your state of residence. Posted e-mails may be edited for length and clarity. If you prefer a private response, please note that in your e-mail. Responses are provided by James A. Klotz, president and co-founder of FMSbonds, Inc., a municipal bond specialist for more than 35 years, and other members of the firm as noted.
Postings are listed by date. If you have any questions, please call us at 1-800-367-2663 or e-mail us.
I read that Puerto Rico stopped setting aside money to pay the General Obligation interest payment in January 2016. Do you think this is indicative of their intent not to make the January 2016 payment?
K.H., Indiana
What are some of the scenarios we bondholders can now expect concerning the outcome of the Puerto Rico debt problem?
R.W., North Carolina
If Puerto Rico gets approval to file Chapter 9 – and does – will this be good or bad for the bondholders?
D.H., New Jersey
In “Puerto Rico: Unable or Unwilling?” you mentioned COFINA bonds, which I own. Payment is due Aug. 1 and I noted the revenue for those bonds was fully collected by year-end 2014. Can we expect timely payment?
C.G., New Hampshire
Lots of “ifs” in your article “Puerto Rico: Unable or Unwilling?” Existing bonds insured by AGC and maybe National might pay off if we’re lucky. Payment for COFINA bonds are due Aug. 1. Puerto Rico’s debt is “CCC-” on its own. There are better opportunities out there, even Chicago!
J.M., Florida
In your article, “Puerto Rico: Unable or Unwilling?” you quote the president of the Government Development Bank as saying officials expect to negotiate a “consensual adjustment” regarding Puerto Rico’s debt. What kind of haircut are we talking about? I committed my financial resources to their bonds and now I’m supposed to give even more.
G.R., Michigan
In your article, “Report: Muni Investors Had a Lousy Spring,” I really like your attitude and your strategy. What advice do you have for a guy whose money is tied up in a large 401(k)? I’m 66 and retiring soon.
R.O., Florida
What is your take on Puerto Rico bonds? Is it safe to buy them again?
G.R., Hawaii
Our financial adviser says long-term municipal bonds “could have a lot of principal risk built into them because of their interest rate sensitivity. The solution is a combination of intermediate-term municipals and a portion of high-income munis to complement them and still maintain decent yields with much less interest rate risk.” We’re confused by the term “interest rate sensitivity.”
M.S.
Do you still believe in the premise of your article, “Muni Supply to Remain Tight in 2015“? CNBC today made it sound quite the opposite.
M.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
Talk to a Muni Bond Specialist
Call 1-800-367-2663 to find the tax-free bonds for you.