A court in Puerto Rico court has affirmed its decision that Doral Financial is entitled to a $230 million tax refund from the territory's Treasury Department.

Doral has claimed that it over-paid taxes from 2002 to 2004. The $8 billion-asset company has spent recent months pressing its claim in Puerto Rico's legal system.

The San Juan Superior Court ruled on Oct. 10 that Doral had a legitimate claim to the refund.

The Treasury Department later asked the judge to reconsider the decision. This week the judge declined to revisit her ruling. The Treasury has promised to appeal the decision to a higher court.

"The Puerto Rico Department of the Treasury has vigorously defended the interests of the people of Puerto Rico in Doral's claim against the government and we will continue to do so as we appeal the decision in the Puerto Rican Appellate Court," Karolee García Figueroa, Treasury Department Interim Secretary, told The Bond Buyer.

Standard & Poor's and Moody's Investors Service have indicated that they believe the Federal Deposit Insurance Corp. will liquidate Doral in the near future. The company has more than $150 million in outstanding municipal debt, issued through Puerto Rico conduit agencies.

Some bond market participants have been concerned that a loss by Puerto Rico in the Doral case would be a financial problem for the territory. Ratings agencies said Puerto Rico's government has about $40 billion to $58 billion in net tax-supported debt outstanding.

S&P in late October released a statement stating that it did not anticipate the Doral case to affect its rating of the territory's general obligation debt.

"If Puerto Rico loses the case after all appeals are exhausted, we believe the size of the award — a $45 million per year payout over five years — would remain relatively small compared with its $9.6 billion current fiscal 2015 budget," S&P analysts David Hitchcock, Horacio Aldrete-Sanchez, and Gabriel Petek wrote in a recent note. The analysts also noted that Puerto Rico passed a law this year that may limit payment of the court judgment to $3 million a year.

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