Another way to track the impact of the storm that is Puerto Rico is to look at the municipal bond market in two ways: with and without Puerto Rico. The new S&P Municipal Bond High Yield ex Puerto Rico Index excludes any bond issued by Puerto Rico. Puerto Rico bonds are included in the S&P Municipal Bond High Yield Index and as a result add 129bps to the yield of the entire muni junk bond market (as of Feb. 24, 2016).
Chart 1: S&P Municipal Bond High Yield ex Puerto Rico vs. S&P Municipal Bond High Yield Index
The posts on this blog are opinions, not advice. Please read our Disclaimers.