BOSTON (Reuters) - Billionaire investor Seth Klarman on Wednesday resisted calls for Puerto Rico’s debt to be wiped out and said the island’s residents will be better off in the long run if obligations are honored.

A man stands on what is left of the balcony of his home and near another destroyed house, after the island was hit by Hurricane Maria in Toa Baja, Puerto Rico. REUTERS/Alvin Baez

Klarman comments came in an email to investors, offering fresh details about how his $30 billion hedge fund Baupost Group sees its bet on Puerto Rican bonds after Hurricane Maria, which largely destroyed the island’s infrastructure.

“In the case of Puerto Rico, expunging the debt would almost certainly eliminate any ability the Commonwealth would have to borrow money in the future at reasonable rates, which will be critical to the island’s rebuilding efforts,” Klarman wrote in the email seen by Reuters.

Baupost is one of many Wall Street firms that stands to potentially lose money on investments in Puerto Rican real estate and debt as the U.S. territory struggles to rebuild.

Calls to forgive Puerto Rico’s more than $70 billion in outstanding obligations have mounted in recent weeks, as much of the island still has no electricity or running water.

On Monday, activist groups, including Hedge Clippers, contacted more than a dozen of Baupost’s investors, including Harvard University, criticizing the fund’s investment in Puerto Rico.

But in his email, Klarman contended that wiping out the debt would hurt residents by undermining Puerto Rico’s ability to access credit markets.

Baupost confirmed earlier in October that it bought roughly $911 million worth of Puerto Rico’s so-called COFINA bonds, which are backed by a chunk of the island’s sales-tax receipts.

The Boston-based hedge fund first bought the assets on the secondary market in 2015 through a special purpose vehicle called Decagon Holdings, according to the email, something that had not been previously reported.

Klarman had sent a separate letter to investors on Friday saying that holders of Puerto Rico’s debt should be willing to accept a discount to par value. He also said Baupost had a $300 million position in COFINA bonds at the end of September.

In May, the U.S. territory filed a form of bankruptcy under the federal rescue law known as PROMESA as it struggled to repay its debts.