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With Puerto Rico bond risk, look here: Expert

As Puerto Rican debt grows even riskier, investors looking for high yield should seek out individual projects or sectors, a top municipal bond analyst said Wednesday.

The commonwealth's Government Development Bank paid only a sliver of its Public Finance Corp. debt service due last weekend. Ratings agencies Moody's and Standard & Poor's classified the nonpayment as a default.

The Puerto Rican Capitol in San Juan
Getty Images
The Puerto Rican Capitol in San Juan

Some high-yield investors find Puerto Rican municipal bonds appealing because of the low price and tax benefits, said Shawn O'Leary, senior research analyst at Nuveen Asset Management. But he contended that much safer high-yield options exist related to infrastructure projects in the U.S.

Read MoreMoody's says Puerto Rico has defaulted

O'Leary looked to the new 3 World Trade Center in New York City, a play on perceived strong demand for office space in the area.

He also cited Community Medical Centers, a network of hospitals near Fresno, California, and Uplift Education Charter School, a Texas school with strong student demand.