March 13, 2014

Attention Investors of Puerto Rican Bonds

business man holding his head with text asking questions about stock broker misconduct

Puerto Rico used to be known as a tax haven for investors. However, Puerto Rico is experiencing huge financial problems that could easily cost American investors a large portion of their investments, particularly if the island goes bankrupt.

Puerto Rico went through an over-borrowing spree in the past few decades. This small island managed to accumulate $70 billion dollars in debt. This ratio is 10 times the median for the US. This borrowing was fueled by US investors willing to by Puerto Rican bonds because of the tax exemption, no federal, no state, and no local taxes on the bonds. This triple exemption made the Puerto Rican bonds very attractive.

This fueled the fire and created a large base for the Puerto Rican bonds. Nearly 70% of US mutual funds own Puerto Rican securities. The problem was that Puerto Rico was taking out long term debt to support short term needs.

Nearly 51% of Puerto Ricans are on welfare. The unemployment rate is 15.4%, and they are losing the young, educated professionals to the US mainland where the unemployment rate is now at 6.6%. The government raised taxes $1.36 billion in 2013. This may increase government revenue, but it slows economic growth.

Puerto Rico’s debt was downgraded by the three major ratings agencies in February 2014, to below investment grade. Some would say they are now referred to as "junk." This could have a severe impact on the US investors, including Wall Street and unfortunately, the small investors.

If you purchased funds from UBS Financial Services Incorporated of Puerto Rico or the US, or through any other broker/dealer (https://www.securitieslawyer.com/ubspuertoricofundloss.html), please call (888) 760-6552 for a free consultation on how to recover your investment losses. Soreide Law Group is currently representing investors nationally and internationally in Puerto Rican Bond loss cases.

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