A PR Outlier?

An outlier event?  On Monday, Puerto Rico was supposed to make a $422 million debt payment. The government paid $22 million in interest, a spokeswoman for the development bank said, but it missed a $367 million principal payment. The government earlier swapped $33 million worth of debt coming due Monday for new debt with later maturities, the spokeswoman said.

The island’s debt is held by mutual funds, hedge funds, bond insurers and individual investors, who were attracted in part by tax benefits and high yields. WSJ.

With triple tax exemption (city, state and federal) some investors are going to get torched.  Who has substantial holdings and will that be enough to cause any domino effect? TBD.