(Reuters) - About half of the $700 million of debt issued by bankrupt Stockton, California, is insured and a few traders have carried on some speculative purchases of its bonds, investors said on Thursday.
Stockton, a city of nearly 300,000 people located about 85 miles (135 km) east of San Francisco, filed for bankruptcy on Thursday evening. City officials said the city was insolvent and a debt restructuring needed.
The bankruptcy will shield Stockton from its creditors, including bondholders, who would have to rely on the insurance company to cash the interest and principal they were owed.
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