Puerto Rico securities are trading on anticipation that investors will need to take losses. Commonwealth general obligations with an 8 percent coupon and maturing July 2035 traded Wednesday at an average 65 cents on the dollar, near the April 6 record low of 63.9 cents, according to data compiled by Bloomberg. The average yield Wednesday was about 13 percent.

Prices on some Puerto Rico securities may drop by about 10 percentage points if the island were to default on its general obligations, Miller said.

A general-obligation default accelerates the issues, Fabian said.

“It forces the issues into court because the GO would be the first real security where bondholders have material recourse to sue Puerto Rico,” Fabian said.

House Speaker Paul Ryan directed members to craft a Puerto Rico bill by March 31. It has yet to move out of the House Natural Resources Committee as lawmakers and the Barack Obama administration work to alter the legislation. House Majority Leader Kevin McCarthy of California said Tuesday that he’s “hopeful” the bill will pass the lower chamber by July 1.

Debt of the GDB, which is operating under a state of emergency to protect its dwindling cash, reflect a bigger loss than general obligations. Taxable GDB bonds maturing May 1 last traded March 11 at an average price of 31.9 cents on the dollar, up from 28.6 cents on Jan. 28, the lowest ever, Bloomberg data show.

“The way the GDB’s trading, investors believe that the May 1 payment will not be paid in full,” said Mikhail Foux, head of municipal strategy at Barclays Plc.

Garcia Padilla declared the state of emergency for the GDB on April 9, limiting withdrawals from the bank only to fund health, public safety and education services. The GDB has $562 million of liquidity, according to the debt-moratorium law.

“Over the last year they’ve done a lot of juggling and they’ve kept the balls in the air, but without revenue growth, without economic growth, you can’t do that forever,” Miller said.

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