The trading prices of Puerto Rico bonds largely account for the losses investors will take when the island restructures its $70 billion debt, said Art Steinmetz, the chairman and chief executive officer of OppenheimerFunds Inc., a major holder of the island’s securities, Bloomberg News reported yesterday. Puerto Rico’s bonds tumbled last month after its federal overseers approved a fiscal recovery plan that will cover only a fraction of the debt payments that are due. That plan is being used to determine how deeply the island needs to cut its debt, which can be done in a bankruptcy-like proceeding if no agreement can be reached with bondholders. One of the island’s most active securities traded yesterday at about 62.9 cents on the dollar. "They’re already priced well below par, so we think a lot of these bonds are close to what they’re going to be worth in a post-restructuring scenario, whatever that happens to be," Steinmetz said yesterday. "The biggest volatility actually happened back in 2013 when the fiscal problems first started surfacing to a wider audience."
