Bloomberg: Puerto Rico Woes Lift Tax-Free Guam to Best Returns

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Guam – A post on the financial business website Bloomberg.com reports that the biggest returns in the municipal bond market are now coming from Guam which offers U.S. investors “tax-free interest without the default speculation enveloping securities from beleaguered Puerto Rico.”
                                                                                                                                    
The story was posted yesterday, Monday July 14. It reports that Guam’s bonds “have surged 10 percent” this year, citing data from Barclays.  That is a better return than all 50 states, as well as other U.S. territories like Puerto Rico and the Virgin Islands, whose debt also carries the same nationwide tax exemption,” according to the Bloomberg report.                                                                                                                                                                                                                                                                         
                                                                                                                                    
The report also quotes  the co-head of MacKay Municipal Managers,  John Loffredo as saying “In Guam, you have a growth story, whereas in Puerto Rico, you don’t. “It’s a very different trajectory,”  Loffredo also acknowledged that his company has increased its Guam holdings in the past year.
                                                                                                                                    
Other highlights from the Bloomberg report:
                                                                                                                                    
* Guam is on pace to outperform Puerto Rico for an unprecedented third straight year.
* Guam’s economy grew 24 percent in the five years through 2012
* Guam had a $2.3 million general-fund surplus for the year through September 2013