Klarman Tells Investors That COFINA Recovery Is Essential For Puerto Rico Success

At the beginning of October, it was reported that Seth Klarman’s hedge fund Baupost, had acquired just under $1 billion of Puerto Rican debt (COFINA bonds — municipal bonds issued by an entity created by the Commonwealth of Puerto Rico in 2006 to securitize future sales tax receipts), a revelation that attracted some interesting responses, which prompted a discussion of the topic in the recent Baupost Q3 Letter, unusual for the secretive hedge fund (in our opinion). [klarman] Q3 Hedge Fund Letters – Maverick Capital Details Its Favorite Shorts, Baupost acquired the debt through an on-paper Delaware-based corporation named Decagon Holdings…