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“You’re able to buy that debt today at huge discounts when I
think the news has already been priced in," Marc Lasry said at
the Reuters Global Investment Outlook Summit in New York.
Avenue, which manages about $13 billion and is best known for
investing in relatively risky loans of troubled companies and
governments, is one of many private investment firms and hedge
funds attempting to make money on the debt of the economically
troubled island.
Puerto Rico defaulted on part of its obligations in August and
has been trying to bring creditors to the table to agree to
reductions on their debt. Funds could make large profits or
losses depending on the price at which they bought into the debt
and the ultimate level at which deals are struck.
Lasry did not specify details on the muni bonds Avenue is
buying.
As of October, the firm owned Government Development Bank bonds
and was part of group of creditors whose restructuring talks
with the government failed, according to people familiar with
the situation at the time.
"It’s hard to get hurt now in Puerto Rico," Lasry said. "It’s
more of a timing risk. Could someone come in and play massive
hardball? Yes, but that would sort of prolong the process. You
can game-theory Puerto Rico.”
That game-theory includes understanding what options the
government has and at what price creditors would cut a deal,
Lasry said.
"The information is out there," he said. "I think how it gets
resolved — the negotiation and the process and the games that
people play — I think I know all the different things they can
do."
For more summit stories, see
Follow Reuters Summits on Twitter @Reuters_Summits
(Reporting by Lawrence Delevingne; Additional reporting by Megan
Davies; Editing by Lisa Von Ahn)
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