Mounting concern over Puerto Rico’s ability to repay debt obligations could continue to add to volatility in high-yield municipal bond exchange traded funds.

High-yield munis dropped off in late June on Puerto Rico default fears but has traded higher since, along with the broader markets. Over the past week, the Market Vectors High Yield Municipal Index ETF (NYSEArca: HYD) gained 0.6%, SPDR Nuveen S&P High Yield Municipal Bond ETF (NYSEArca: HYMB) was up 0.6% and the shorter duration Market Vectors Short High-Yield Municipal Index ETF (NYSEArca: SHYD) was relatively flat.

The more speculative-grade muni ETFs hold a position in the island commonwealth. Puerto Rico is 2.9% of HYD, 8.8% of HYMB and 5.1% of HYD.

However, in another sign that the island could be on shakier grounds, Public Finance Corp has failed to transfer funds to make a $58 million bond payment due August 1, reports Nicole Bullock for the Financial Times.

PFC funds make payments from appropriations in Puerto Rico’s budget each year, but lawmakers did not provide money for the bonds this year.

“In accordance with the terms of these bonds, the transfer was not made due to the non-appropriation of funds,” Melba Acosta Febo, president of Puerto Rico’s Government Development Bank, told the FT.

Meanwhile, the Caribbean island is still working on a restructuring its $72 billion debt obligation. At the end of June, Puerto Rico governor Alejandro García Padilla was concerned about the government’s ability put together enough cash, stating that the island’s debt was “not payable.”