Puerto Rico's Debt Is Quietly Sitting in Mom and Pop Mutual Funds as Trump Says "It Will Be Wiped Out"

In July, Reuters reported that Oppenheimer's various tax-free mutual funds had the largest mutual fund holdings of Puerto Rico bonds as of April 30, totaling a whopping $7.3 billion face amount. According to Oppenheimer's September SEC filings reviewed by Wall Street On Parade this morning, most of that debt is trading at a large discount to the face amount and the values, reported as of June 30, 2017 to the SEC, do not reflect the new market lows experienced by the bonds since Hurricane Maria made a direct hit to Puerto Rico in late September. (Reuters reported that the second largest mutual fund holder of Puerto Rico debt as of April 30 was Franklin funds, which also provides popular tax-free funds to mom and pop investors. Franklin was reported to be holding approximately $3 billion face amount of Puerto Rico bonds.)

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In its September SEC filing, OppenheimerFunds notes that it has set up a special web section to provide updates on the situation with its Puerto Rico bond holdings. Tellingly, those web pages have not been updated since the devastation from Hurricane Maria occurred, suggesting OppenheimerFunds understands it's now in uncharted waters.