\t\t\t\tThe financial fallout caused by Hurricanes Irma and Maria is being felt not just on the island of Puerto Rico, but in the U.S. mainland as well. Puerto Rico bonds, which were already in trouble prior to the storms because of the island\u2019s faltering economy and bankruptcy, are expected to take even more of a hit. Moody\u2019s Investors Service assesses the future of the bonds, which were already at a Caa3 rating, as negative. The ratings agency said that the \u201cdisruption of commerce\u201d caused by hurricanes will drain Puerto Rico\u2019s \u201calready weak economy\u201d further. All of this is expected to impact not just the Puerto Rico bonds but also the mutual funds based on the U.S. mainland that hold them, which means that investors will be impacted. <\/p>\n
According to InvestmentNews<\/em>, Morningstar stated that 15 municipal bond funds, \u201c14 of them from Oppenheimer Funds (OPY),\u201d have at least 10 % of their portfolios in the island\u2019s bonds. The 15th fund is from Mainstay. Morningstar reported that through September 28, the funds lost a 1.57% average for the month. The Oppenheimer Rochester Maryland Municipal Bond (ORMDX), which has 26% of its portfolio in Puerto Rico bonds, was considered the worst performer. In addition to Oppenheimer and Mainstay, other U.S.-based funds that are losing money from Puerto Rico bonds, include, as reported by The New York Times<\/em>:<\/p>\n \u00b7 Paulson & Co., which has invested billions of dollars in Puerto Rico securities. The Wall Street firm is run by hedge fund manager John A. Paulson.<\/p>\n