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SAN JUAN, Puerto Rico, July 21, 2015 (GLOBE NEWSWIRE) -- The Securities Arbitration Law Firm of Klayman & Toskes, P.A. ("K&T"), www.sueubspuertorico.com, and Carlo Law Offices comment on Standard & Poor's ("S&P") decision to downgrade the credit rating on debt issued by Puerto Rico Public Finance Corp's ("PRPFC") in 2011 and 2012 from "CCC-" to "CC". The S&P rating agency downgrade came after the PRPFC failed to transfer money to the bond trustee for the $58 million bond payment due Aug 1st. As a matter of practice, funds are transferred 15 days in advance of payment date. With this development, S&P warned that a default on the payment due by the PRPFC on August 1st has now become "a virtual certainty." S&P stated, "We believe a default on the PFC bonds would be further demonstration of increasing unwillingness to pay debt in full and also raises the potential for future unequal treatment between various types of bondholders."
In a recent report Bond Buyer asserted that, "Holders of that debt may have no recourse." In support of this opinion PRPFC Series 2004B Bond Offering documents declare that, "The 2004 Series B bonds will not constitute an obligation of the Commonwealth of Puerto Rico or any of its political subdivisions or public instrumentalities (other than the corporation), and neither the Commonwealth of Puerto Rico nor any of its political subdivisions or public instrumentalities (other than the corporation) will be liable thereon. The Corporation has no taxing authority."
Securities arbitration attorney, Steven D. Toskes comments on the recent events, "The 2016 Puerto Rico budgetary process has begun to buckle under the strain of excessive debt levels. Investors in PRPFC issued 2004 Series B bonds are most likely the first to be faced with an actual default in interest payments." Mr. Toskes continues, "This pending default should lead investors to consider loss recovery options, including a Financial Industry Regulatory Authority (FINRA) arbitration claim for the failure to disclose the risks associated with concentrated investments in Puerto Rico Bonds that is the result of a brokerage firm's failure to supervise its financial advisors."
Klayman & Toskes, P.A. and Carlo Law Offices are dedicated to the rights of Puerto Rico investors. Puerto Rico investors who suffered losses as a result of FINRA sales practice violations may be able recover their losses in a FINRA arbitration claim. Klayman & Toskes, P.A., a leading securities and litigation law firm, practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors against major Wall Street brokerage firms.
CONTACT: Klayman & Toskes, PA Steven D. Toskes, 787-919-7325 email@example.com www.nasd-law.comNEXT ARTICLE
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