A restructuring bill for Puerto Rico’s debt passed a key procedural vote in the U.S. Senate Wednesday, which increases the likelihood that the legislation will be approved in a final vote. The bill aims to restructure Puerto Rico’s massive $72 billion in debt. The island faces a debt payment on Friday, and is widely expected to default on that debt. Natalie Cohen, managing director of Municipal Securities Research at Wells Fargo, says the bill will give Puerto Rico time to restructure its finances. She says many mutual funds holding Puerto Rican debt have already sold it, but some funds still holding the debt could see some losses. She doesn’t expect a widespread ripple through the muni market however, and notes there’s been an increase in foreign investment into U.S. muni bonds.
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