Investors can buy 8 percent notes maturing in 2035 at 79 cents on the dollar, “triple-tax free of about 11 percent” yield, and “the government is committed to repaying the debt in time,” Gundlach said.

“I’ve started to buy them,” he said. While so far it’s “only a partial position,” he said, “I think these bonds go lower, but I think you start buying them at 78.”

Gundlach cited Puerto Rico’s 6.2 percent pension obligation bonds due in 2039, which are trading at 37.6 cents on the dollar to yield about 17 percent, according to prices compiled by Bloomberg.