Ben Thompson Explains Why The Puerto Rico Bonds Situation Is 'Very Complicated'

• Benzinga got a sneak peek at this Sunday’s Wall Street Week.
• The show will feature Samson Capital Advisors Managing Partner & CEO Ben Thompson with CBD Trading Founder Larry Altman and Worth Group Editor-in-Chief Richard Bradley.
• This article will focus on Thompson’s comments on the Puerto Rican Bonds and the country’s debt situation.

In a wide-ranging chat the hosts and Larry Altman, Ben Thompson went into what he believes investors should do with Puerto Rican bonds, which offer certain benefits like high yields and the exception from U.S. Federal, State and local taxes. However, the governor says that, in the current economic environment, the island cannot pay back its debt.

“The market’s priced for a haircut but the question is what happens to right-size Puerto Rico’s debt,” Thompson explained.

Related Link: Is There A Difference Between Good Debt And Bad Debt?

Thompson was then asked if individual investors should wait for a restructuring – for which activist hedge fund investors are now pushing. To this, he answered that the situation could more complicated than just waiting for restructuring. “I can’t say either way; because you’re basically making a bet on what the restructuring prices are. And if you hold Puerto Rico general obligations or you hold Puerto Rico government development bonds [or Puerto Rico electric authority] you could have a outcome. So, it’s very complicated.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.