As the eyes of the world focus on Greece and its impending default, another debt crisis closer home is rearing its head again, and it's already claimed two victims: Assured Guarantee and MBIA.
Shares of bond insurers fell hard on Monday after Puerto Rico Gov. Alejandro Garcia Padilla told The New York Times that the Commonwealth would not be able to make its debt obligations. The news prompted brokerage firm BTIG to downgrade both Assured and MBIA to "hold," sending shares of both companies down a respective 13 percent and 23 percent.
BTIG estimates Assured and MBIA have over $10.5 billion in gross exposure to Puerto Rico's debt, and the firm's previous buy rating was predicated on previous promises from the governor that Puerto Rico would do whatever it took to honor its debt obligations.
And according to some market participants, the plight of bond insurers is just the start of broader debt crisis.
Read More PR debt: With few options left, 'People are going to leave'
Meanwhile, Standard & Poor's has lowered its credit rating on Puerto Rico to CCC-minus from CCC-plus with a negative outlook, as the governor of the commonwealth seeks to restructure the debt under U.S. bankruptcy code.
"It's a substantial threat," bond expert Larry McDonald said Monday on CNBC's "Power Lunch." "The problem we're seeing around the world is that political officials that are borrowing money in the capital markets have not been completely forthcoming about their financials."
McDonald, head of U.S. macro strategies group at Societe Generale, is concerned that other government entities that want to tap the capital markets might be forced to borrow at higher rates, or worse, be shut out of the capital markets altogether. The lack of ability to borrow, said McDonald, could create more skittishness in the already volatile fixed income markets.
MBIA and Assured were at the center of the housing crisis, and nearly collapsed due to their exposure sub-prime debt. Now another debt crisis is thrusting them firmly back into the spotlight, and according to one technician's chart work, investors would wise to stay away.
"This is an ugly, broken chart and this is indicative of problems to come in Puerto Rico," technical analyst Todd Gordon also said on "Power Lunch."
According to Gordon, the charts point to more pain.
"We've broken anything that resembles support so if we get through the $6 region you're going to look for a retest of those post-2008 credit crisis lows around $3," said Gordon, founder of TradingAnalysis.com.
With Monday's selloff, both MBIA and Assured turned negative on the year.
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