According to reports,  U.S. fund manager OppenheimerFunds, the largest holder of Puerto Rico debt among U.S. municipal bond funds, warns that it stands ready to defend the terms of bonds it holds. This statement comes a day after the governor said he wanted to restructure debt and postpone bond payments.

Puerto Rico’s Governor Alejandro Garcia Padilla recently stated that he wants to offer reduced payouts as he tries to restructure the island’s $73 billion debt to relieve its fiscal problems.

OppenheimerFunds, believes the island can repay bondholders while providing essential services to citizens and growing the economy.

Governor Padilla said on Monday his goal was to come up with a negotiated moratorium with bondholders to postpone debt payments for a number of years.

Puerto Rico’s bonds fell sharply for a second session on Tuesday, with general obligation 8 percent bonds maturing in 2035 as low as $64.50 versus a low of $68.75 on Monday. Almost 10 percent of municipal bonds that tradedMonday were Puerto Rico-related.

After Governor Padilla’s remarks, S&P said a default, distressed exchange or redemption of Puerto Rico’s debt within the next six months seemed inevitable.

The commonwealth is still making payments. On Tuesday it made its final payment on a $900 million short-term loan, according to a source close to the banks. It will also make a coupon payment of $645.2 million on its general obligation debt, due Wednesday.

Puerto Rico’s deepening financial crisis could speed up an exodus of money from U.S. municipal bond funds.

U.S. open-ended municipal bond funds have $11 billion of Puerto Rico bonds and nearly 53 percent of such funds have exposure to the commonwealth. These municipal funds typically have multiple investors and are popular for retirement funds.

The White Law Group continues to investigate the liability that brokerage firms may have for recommending investments in Puerto Rico bonds and bond funds over concentrated in Puerto Rico debts.

If you suffered losses in a Puerto Rico bond or bond fund and would like a free consultation with a securities attroney, please call The White Law Group at 312-238-9650.

To learn more about The White Law Group, please visit our website  https://www.whitesecuritieslaw.com/

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