OREANDA-NEWS. Fitch Ratings has reviewed and affirmed the ratings assigned to medium-term notes programs and short-term notes programs maintained by seven Puerto Rico closed-end funds (CEFs) co-advised by Popular Asset Management and UBS Asset Managers of Puerto Rico. A complete list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The main drivers for the rating actions are:

--The asset coverage requirements for each series of notes at the individual, sub-account level when notes are outstanding;

--The structural protections afforded by mandatory collateral maintenance provisions in the event of asset coverage declines;

--The legal and regulatory parameters that govern the funds' operations;

--The capabilities of UBS Asset Managers of Puerto Rico and Popular Asset Management as co-advisers.

As of Sep. 30, 2016 none of the Banco Popular closed-end funds had rated notes outstanding. As such, the rating affirmation is not driven by current asset coverage levels but by the rating drivers listed above.

FUND SUMMARY

The funds are corporations organized under the laws of the Commonwealth of Puerto Rico and are duly registered as non-diversified, closed-end management investment companies under the Puerto Rico Investment Companies Act, as amended.

The funds normally invest at least 67% of total assets in securities issued by Puerto Rico entities. These include securities issued by the Commonwealth of Puerto Rico, Puerto Rico mortgage-backed and asset-backed securities and corporate obligations and preferred stock of Puerto Rico entities.

The funds increase amounts available for investment through the issuance of preferred stock, debt securities, or other forms of leverage, representing not more than 50% of total assets immediately after any such issuance.

STRUCTURAL PROTECTIONS

At the time of the ratings affirmations, the funds did not have any rated notes outstanding and therefore were not required to maintain asset coverage levels. When rated notes are outstanding, each fund segregates collateral for each series of 100% Principal Protected Notes (comprised of a medium-term note series and a short-term note series). The Fitch overcollateralization (OC) tests calculate asset coverage available to the notes and preferred stock, based on discounted market prices and diversification of the assets in each segregated collateral account. The funds have covenanted to maintain asset coverage amounts deemed consistent each fund's assigned ratings. Should either of the asset coverage tests decline below 100% (as tested weekly) and not cure within the pre-specified timeframe of five business days, the governing documents would require the fund to reduce leverage in a sufficient amount to restore compliance with the applicable asset coverage tests on the final day of the cure period.

THE ADVISOR

UBS Asset Managers of Puerto Rico and Popular Asset Management are the funds' investment advisors. Subject to the supervision of the funds' boards of directors they are responsible for the funds' overall investment strategy and implementation. UBS Asset Managers of Puerto Rico is a division of UBS Trust Company of Puerto Rico, which is an affiliate of UBS Financial Services Incorporated of Puerto Rico and Popular Asset Management is a division of Banco Popular de Puerto Rico.

RATING SENSITIVITIES

The ratings may be sensitive to material changes in the credit quality or market risk profiles of the funds. A material adverse deviation from Fitch guidelines for any key rating driver could cause the ratings to be lowered by Fitch. Changes in the supply-demand dynamics with respect to invested collateral types may influence Fitch's analytical approach to the liquidity of underlying collateral types. In addition, the amount of total leverage assumed by a fund could also influence Fitch's analytical conclusion if such leverage increased the likelihood of a bankruptcy stay with respect to the overall fund.

RATING ACTIONS

Fitch affirms the following:

Puerto Rico Investors Bond Fund I, Inc.

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.

Puerto Rico Investors Tax-Free Fund

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.

Puerto Rico Investors Tax-Free Fund II

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.

Puerto Rico Investors Tax-Free Fund III

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.

Puerto Rico Investors Tax-Free Fund IV

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.

Puerto Rico Investors Tax-Free Fund V

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.

Puerto Rico Investors Tax-Free Fund VI

--Medium-term notes series at 'A';

--Short-term notes series at 'F1'.