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More Headwinds For UBS Puerto Rico Bond Fund Investors

Three weeks ago, Fitch Ratings placed Puerto Rico’s BBB minus credit rating on negative watch which meant the next step was to downgrade Puerto Rico’s general obligation bonds to junk status. Yesterday, the Moody’s Investors Service joined in Fitch Ratings’ analysis and placed Puerto Rico’s general obligation bonds and related credit on review for possible downgrade to junk bond status as well. Both Moody’s and Fitch, as well as Standard & Poors rate Puerto Rico debt a single level above junk. All three rating agencies have expressed concerns about the Island’s inability to access the market for refinancing at reasonable rates; the extent to which budget targets for the current fiscal year are being met; the instability in the performance of the Puerto Rico economy.

All three of these rating agencies have impacted Puerto Rico bond prices and consequently the value of the UBS Puerto Rico closed-end bond funds held by so many Puerto Rico investors. Undoubtedly, the net asset values (NAVs) of the various funds which have continued to move downward will decline further when the reports are released next week. The most recent NAV’s published on December 4, 2013, put the value of the funds as follows:

Notwithstanding, UBS Puerto Rico, Santander Securities, Popular Securities, Merrill Lynch and Oriental Financial Advisors have continued to recommend the funds as good investments. A large number of investors have called our offices with stories about how their brokers claim this is a buying opportunity. Nothing could be further from the truth as evident by all three agencies ratings! These financial advisors simply have no reasonable basis for their recommendations.

Have you suffered losses in a Puerto Rico closed-end bond fund investment? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. We have associated with an attorney in San Juan, Puerto Rico, namely Lcdo. Julio Cayere-Quidgley, who will meet with you and discuss your case at no charge. Mr. Pearce and Mr. Cayere are accepting clients with valid claims against UBS Puerto Rico, Santander Securities, Popular Securities, Merrill Lynch and Oriental for misrepresentations, overconcentration and/or unsuitable recommendations of its bond funds.

The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Robert Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Attorney Adam Kara-Lopez habla español. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.