Guam's municipal debt trading volume spikes as North Korea tensions rise

NEW YORK, Aug 9 (Reuters) - The total trading volume of Guam's municipal debt rose sharply on Wednesday compared to its daily average over the prior month, as the U.S. territory found itself caught in a war of words between U.S. President Donald Trump and North Korea.

Even as the Pacific territory's debt trading volumes hit nearly $12 million, according to a review of Thomson Reuters data, prices were only marginally changed on the day.

North Korea said it was "carefully examining" a plan to strike Guam with missiles in a response to Trump's incendiary comments on Tuesday that threats to the United States from Pyongyang would be met with "fire and fury."

In the month prior to Wednesday's activity, the daily average volume of Guam's debt was roughly $2.24 million. On Aug. 3 volume reached $8.61 million, second only to Wednesday's activity.

S&P Global rates Guam's General Obligation debt (GO) at a highly speculative BB-minus level with a stable outlook given its large unfunded liabilities and tight year-to-year budgets, said S&P Global analyst Ted Chapman.

The firm tracks about $2.46 billion of the island's outstanding municipal debt.

Chapman said it can be difficult to factor in the threat from a sovereign nation to a rated entity such as Guam, noting S&P would continue to rate the territory by its "credit fundamentals" alone. (Reporting by Stephanie Kelly; Editing by Daniel Bases)