Billions of Dollars Have Already Been Lost by Investors in Puerto Rico Closed-End Funds that were Sold by UBS

According to new research from a consulting group, the losses of investors who purchased UBS Puerto Rico closed-end municipal bond funds is now in the billions of dollars. During the first nine months of 2013 alone, reports, 19 of UBS’s Puerto Rico closed-end funds lost $1.6 billion. The ones that lost the most were reportedly the funds with big muni bond holdings that were underwritten by UBS.

UBS Financial Services, Inc.’s Puerto Rico unit put together and sold roughly $10 billion in closed-end bond funds between 2002 and 2012. As the funds were only registered to be sold in Puerto Rico, they were largely composed of Puerto Rico municipal bonds and could be sold only to Puerto Rican residents, who have now been hit with huge losses as the value of Puerto Rican debt has fallen sharply over the last few months.

In addition to UBS’s bond funds, other bond funds that have purchased Puerto Rican debt and investors holding individual Puerto Rican bonds in the US have been significantly impacted. In fact, if Puerto Rico were to default on its debt, the impact would be far reaching. According to, a default in Puerto Rico would change the price of the whole $3.7 trillion US municipal bond market, which could cost municipalities and states in the US billions of dollars in interest rate charges. Already, investors on the mainland found themselves paying close to $10 billion last year because Puerto Rico’s $52 billion in bonds were down 20% on average.

Please contact our Puerto Rico bond fund lawyers if you bought closed-end bond funds, other municipal bond funds or Puerto Rican bonds from UBS, Banco Santander (SAN.MC), Banco Popular, or other brokerage firms in Puerto Rico and the US. Our securities fraud law firm represents muni bond investors in the mainland and the commonwealth. Your case consultation with us is free.



Could a Puerto Rico Default Hammer the $3.7 Trillion U.S. Muni Bond Market in 2014?, Forbes, January 3, 2014

UBS Puerto Rico closed-end muni investors losing billions, Investment News, January 6, 2014

More Blog Posts:
UBS Bank USA No Longer to Offer Loans Collateralized with Puerto Rico Securities, Stockbroker Fraud Blog, December 28, 2013

Puerto Rico Reportedly Among Those that Engaged in “Scoop & Toss” Tactic with Municipal Bonds, Stockbroker Fraud Blog, December 7, 2013
Hedge Funds Are Moving in on Municipal Debt, Including Puerto Rico Debt, Institutional Investor Securities Blog, November 15, 2013