The auditor of the Government Development Bank of Puerto Rico is warning about possible defaults by Puerto Rico government bodies.

The Independent Auditor's Report on the bank was released on Feb. 11. The auditor, Deloitte & Touche LLP, noted that $5.7 billion, or 36%, of the bank's total assets as of June 30, 2012, were loans to the Commonwealth of Puerto Rico or its agencies.

"The collectability of these loans may be affected by budgetary constraints, the fiscal situation and the credit ratings of the commonwealth of Puerto Rico and its agencies and instrumentalities, and their ability to generate sufficient funds from taxes, charges and/or bond issuances," the auditor wrote.

"Continuance of and/or significant negative changes in these factors may affect the ability of the commonwealth and its agencies and instrumentalities to repay their outstanding loan balances with the bank and, accordingly, may have an adverse impact on the bank's financial condition, liquidity, funding sources and results of operation."

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