Declining Credit Ratings More Trouble for UBS Puerto Rico Bond Investors

by InvestorLawyers on November 26, 2013

in Arbitration,Bonds,FINRA,Securities Fraud,Suitability,UBS

Investment fraud lawyers continue to investigate claims on behalf of investors who suffered significant losses in Puerto Rico municipal bonds and closed-end mutual funds exposed to losses in such bonds,  even as declining credit ratings threaten to drastically increase the losses suffered by many investors.

Declining Credit Ratings More Trouble for UBS Puerto Rico Bond Investors

Both Standard & Poor and Moody had already put Puerto Rico’s general obligation municipal bonds on negative watch when Fitch Ratings joined them on November 14. The Puerto Rico bonds are already rated by all three agencies at just one step above “junk,” or non-investment grade. Currently, Puerto Rico has outstanding debt amounting to around $11 billion in this category, and securities arbitration lawyers say that the negative watch given to the bonds by all three rating agencies is an indication that the debt will likely be downgraded in the coming months to junk-bond status.

If these bonds are downgraded to junk status, the resulting flood of sales could cause another drastic drop in the bonds’ price, and could also result in losses in closed-end mutual funds invested in the bonds. Unfortunately, most buyers are unwilling to accept the risk of purchasing these bonds unless significantly discounted, leaving many investors forced to keep the investment or sell it at a significant loss.

Some of the funds currently being investigated by investment fraud lawyers are:

  • Puerto Rico Mortgage Backed & U.S. Government Fund
  • Puerto Rico Fixed Income Funds I-VI
  • Puerto Rico AAA Portfolio Bond Funds I and II
  • Puerto Rico AAA Portfolio Target Maturity Fund
  • Puerto Rico Investors Bond Fund II
  • Puerto Rico Investor’s Tax-Free Funds I-VI
  • Puerto Rico GNMA & U.S. Government Target Maturity Fund
  • Puerto Rico Tax-Free Target Maturity Fund I and II
  • Tax-Free Puerto Rico Target Maturity Fund
  • Tax-Free Puerto Rico Funds I and II

If you suffered significant losses in funds invested in Puerto Rico bonds through UBS Financial Services or another financial advisor, you may be able to recover your losses through FINRA securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net  for a no-cost, confidential consultation.

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