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Puerto Rico Bonds: How Widespread Is The Risk To Retail Investors? – Investors.com

How worried should investors be about their municipal-bond funds’ exposure to Puerto Rico? Investors got a jolt when the island’s Public Finance Corporation (PRC) failed to make a $58 million payment due on Aug. 3. The tiny fractional amount that it coughed up instead constituted a default.

And at the end of this month, the commonwealth is slated to propose a plan for restructuring its overall $72 billion debt, which Gov. Alejandro Garcia Padilla has called unpayable.

Mutual funds held at least $10.06 billion of the island’s bonds as of their latest disclosure dates, according to Morningstar Inc.

And several funds have sizable exposure. Forty-three funds have Puerto Rico debt weightings of at least 5%. In four of them, Puerto Rico debt amounts to 20% or more of total assets.


Read More At Investor’s Business Daily: http://news.investors.com/investing-mutual-funds/081315-766494-are-you-exposed-to-puerto-rico-bonds.htm#ixzz3ikHX3fNx 
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