High-yield Puerto Rican bonds hold upside, but big risks remain as the commonwealth could fail to meet its next payment deadline, one municipal bond investor said Thursday.
The cash-strapped island's Public Finance Corp. faces an Aug. 1 deadline to pay $58 million to bondholders. At low prices, Puerto Rican municipal bonds make a strong play for yield seekers if the government can make its payments, said Daniel Solender, lead portfolio manager for municipal bonds at Lord Abbett.
"Prices are low today. There's a lot of potential decent outcomes, even where the bonds are today," he said in a CNBC "Power Lunch" interview Tuesday.