Moody's Credit Review Of Puerto Rico Bonds May Substantially Increase Investor Losses And Impact Investor Claims

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Dec 18, 2013, 05:39 ET

SAN JUAN, Puerto Rico, Dec. 18, 2013 /PRNewswire/ -- Moody's Credit Review of Puerto Rico bonds may substantially increase investor losses and impact investor claims. Lawyers with the securities law firm Shepherd Smith Edwards & Kantas LLP, http://www.ubs-taxfree-puertorico.com/, have been investigating the claims of many investors who purchased Puerto Rico municipal bonds at the recommendation of their brokers.

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Moody's has begun a review of most of Puerto Rico's outstanding bonds which, coupled with the negative outlook the bonds already carry, indicates a good chance that Puerto Rico's bonds will be downgraded. This could also push many of those bonds into speculative or "junk" status. Moody's may also downgrade the rating of Sales Tax Financing Corporation ("COFINA") bonds, which are currently the highest rated Puerto Rico bonds.

Many of the owners of Puerto Rico's debt are investment companies, like mutual funds. Many of those companies are only forbidden from owning junk bonds. If Puerto Rico bonds get downgraded to junk, these companies would be forced to sell all of those bonds at fire-sale prices, which would cause a huge drop in the price of those bonds. There are not nearly enough buyers in the market to absorb such a large sale without a hugely discounted price.

According to Moody's analysts, a downgrade to junk status would immediately cost Puerto Rico up to $1 billion in swaps, variable rates, and acceleration provisions of currently outstanding debts. This would also greatly increase the costs for Puerto Rico to raise new money through another bond issuance, if it could do so at all. As a result, investors who hold these bonds are likely to see things get worse before it gets better. If you are or were a customer of UBS Puerto Rico who invested in Puerto Rico municipal bonds at the recommendation of your broker, either through a mutual fund or proprietary product, or directly, contact the law firm of Shepherd Smith Edwards & Kantas LLP for an evaluation of your account to determine if you might have a claim to attempt to recover some or all of your losses. All communications will be kept strictly confidential, and you will not be billed in any way for a consultation.

Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. For more than two decades, our firm has represented thousands of investors throughout the United States, Puerto Rico, and internationally to recover losses suffered through brokerage firms and banks. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions. More information can also be found at our blog at http://www.stockbrokerfraudblog.com/2013/10/puerto_rico_municipal_bonds.html.

Contact Info: 866-377-2529

Sam Edwards [email protected]

Luis Acevedo [email protected]

SOURCE Shepherd Smith Edwards & Kantas LLP