Thursday, October 17, 2013

Puerto Rico Seeks To Calm Rattled Muni Bond Investors

Puerto Rico officials sought to soothe the fears of edgy investors Tuesday as the market continues to price risk into the tropical island’s widely held municipal bonds. “These are not just constitutional obligations, but also moral obligations,” said Governor Alejandro Garcia Padilla in an investor webinar, reaffirming the island’s intent to make good on its debt obligations.

South view of the building, located in the Pue...Puerto Rico has roughly $70 billion in outstanding municipal bonds, which hold the lowest investment grade rating from major rating agencies. Its debt has long been held in municipal bond funds because its bonds are exempt from local, state, and federal taxes, but investor concerns have grown.

Another aspect of this bond debacle is marketing of the bonds by some brokerage firms, notably UBS. We are prosecuting and investigating claims against UBS for those practices, as well as other broker dealers, who may not have properly disclosed the risks in the Puerto Rico bonds.

For more information - Puerto Rico seeks to calm rattled muni bond investors

Related articles
Enhanced by Zemanta