July 10, 2017 Comments (0) Blog, Current Investigations, Securities Fraud

Fitch downgrades Puerto Rico COFINA bonds to D

COFINA bonds
(Last Updated On: July 24, 2017)

COFINA Bonds Investment Losses

Did you lose money investing in Puerto Rico COFINA Bonds at the recommendation of your broker? If so, the attorneys at The White Law Group may be able to help you recover your losses by filing a   FINRA Arbitration claim against the brokerage firm that sold you the investment.

Puerto Rico COFINA bonds or Puerto Rico Urgent Interest Fund Corporation Bonds, are attached to Puerto Rico’s sales tax. COFINA is a corporation that is owned and controlled by the Puerto Rican government. When it issues debt, the funds that will be used for repayment comes directly from sales tax revenue.

COFINA bonds have been falling in price since U.S. District Judge Laura Taylor Swain was appointed to preside over the bankruptcy-like proceedings initiated in early May.

More Bad News for COFINA bonds Investors

On July 3 Fitch Ratings announced it has downgraded the rating on the Puerto Rico Sales Tax Financing Corporation (COFINA) $6.3 billion senior lien sales tax revenue bonds and $8.9 billion first subordinate lien sales tax revenue bonds to D from C.

While COFINA has continued to make transfers to the Trustee, payments to bondholders are not being disbursed pursuant to an order of the U.S. District Court for the District of Puerto Rico, Fitch said.

The court has ordered the Trustee to interplead the June 1 payment and any future payments of principal and interest on senior and subordinated COFINA sales tax bonds until a final order of the court resolves the dispute among bondholders and COFINA about whether or not certain events of default have occurred.

To date, only bonds with monthly interest payments have been affected; certain bonds have principal payments due on Aug. 1, according to Fitch.

Ratings on securities that have not defaulted remain at C Rating Watch Negative. The commonwealth’s Issuer Default Rating (IDR) remains RD, indicating that the issuer has defaulted on a select class of its debt, the agency said.

The ratings on the COFINA bonds have reached the lowest level on Fitch’s rating scale. Fitch expects to reexamine the commonwealth’s credit profile once debt restructuring plans become clear.

Recovery of Investment Losses in COFINA bonds

The White Law Group is investigating the liability that brokerage firms may have for improperly selling Puerto Rico COFINA Bonds.

Broker dealers are required to perform adequate due diligence on all investment recommendations to ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

If you suffered losses investing in Puerto Rico COFINA Bonds, the attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that recommended the investment to you.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in claims against their brokerage firm.

For a free consultation with one of the firm’s securities attorneys, please call (888) 637-5510. For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.