The U.S. Supreme Court on Monday declined to take up a dispute that has roiled the $3.8 trillion U.S. municipal bond market over payments on special revenue bonds that grew out of Puerto Rico’s ongoing bankruptcy.
The justices left in place lower court rulings dismissing lawsuits by bond insurance companies Assured Guaranty Corporation and Ambac Assurance Corporation that sued the federally created financial oversight board that is trying to restructure about $120 billion of Puerto Rico’s debt. The companies had asked the justices to reverse the lower court rulings.
The high court’s action leaves a dark cloud over special revenue bonds, which could increase borrowing costs for local governments seeking to finance infrastructure projects. (reuters)