The accompanying Figure 1 shows the breakdown of the investment portfolio as of September 30, 2018.

2018

Dear Shareholder: The Puerto Rico Investors Bond Fund I (the Fund ), is pleased to present its Annual Report to Shareholders for the fiscal year ended on September 30, 2018. PUERTO RICO INVESTORS BOND FUND I The investment objective of the Puerto Rico Investors Bond Fund I is to achieve a high level of tax-advantaged current income, consistent with the preservation of capital for its shareholders. FUND PERFORMANCE For the twelve-month period ended on September 30, 2018, the Fund generated a total rate of return on investment of 6.48% and 7.89% based on the net asset value per share ( NAV ) and market value per share, respectively. The Fund s NAV as of September 30, 2018 was $3.36, compared to $3.42 at the end of the prior fiscal year. Meanwhile, the average dividend yield for the period, computed over the original investment of $10 per share, was 1.84%. At the end of the fiscal year, the market price of the shares was $2.17, representing a 35.4% discount to NAV. The Fund s investment portfolio had weighted-average duration of 9.10 years as of September 30, 2018. The accompanying Figure 1 shows the breakdown of the investment portfolio as of September 30, 2018. Figure 1. Asset Allocation as of September 30,2018 AFICA BONDS PUERTO RICO FREDDIE MAC TAXABLE PR COLL. MORTGAGE OBLIG. TAX. PUERTO RICO AGENCIES PUERTO RICO TAX EXEMPT NOTES PUERTO RICO GNMA TAXABLE PUERTO RICO FANNIE MAE TAXABLE PUERTO RICO GNMA EXEMPT US MUNICIPAL OBLIGATIONS 0.03% 0.31% 0.34% 0.65% 0.76% 1.96% 2.40% 6.89% 8.44% PR GOV. INSTR. TAX EXEMPT NOTES 24.14% US GOV. SPONSORED ENTITIES 54.08% 0% 10% 20% 30% 40% 50% 60% Figure 1. Asset Allocation as of September 30, 2018 1

INVESTMENT STRATEGY The Fund's investment advisers strive to select investment assets that maximize risk/return relationships, while adhering to the Fund's investment objectives. ECONOMIC OVERVIEW Puerto Rico Economy and Markets The Economic Development Bank of Puerto Rico's EDB Economic Activity Index ( EDB- EAI ) is an indicator of the general economic activity in Puerto Rico that is highly correlated with real GNP. It summarizes the behavior of four major monthly indicators: total nonfarm wage employment, cement sales, gasoline consumption and power generation. For September 2018 the EDB-EAI figure was 121.5, a 0.4% contraction compared to the previous month but a 5.2% increment when compared to September 2017, when Puerto Rico was struck by hurricanes Irma and Maria. Based on the average of monthly EDB-EAI figures for the government fiscal year that ended on June 30, 2018, there was a 6.8% reduction with respect to the previous fiscal year. As of September 30, 2018, approximately 24.8% of the Fund s investment portfolio consists of Puerto Rico government or government-related securities including, among others, COFINA and POB bonds. Prices on these securities remained volatile during the Fund s fiscal period responding to the many developments in the Puerto Rico market. As of September 30, 2018, Puerto Rico has defaulted on many of its debt obligations. At the end of the fiscal year, 24.4% of the total assets of the Fund were invested in Puerto Rico bonds that have stopped generating income. Puerto Rico Update In the Title III case for the Puerto Rico Sales Tax Financing Corporation ( COFINA ), the U.S. District Court for the District of Puerto Rico (the "District Court") granted a motion by Bank of New York Mellon ("BNYM"), the COFINA bond trustee, ruling that all funds for payment of interest and principal on COFINA bonds were to be held by BNYM pending the resolution of the various conflicting claims of holders and insurers of COFINA bonds. Additionally, the Commonwealth has asserted claims against the collateral securing the COFINA bonds, and there is litigation pending between the Commonwealth and COFINA regarding ownership of this collateral. As a result, all interest and principal payments on the COFINA bonds are currently suspended, pending resolution of the various conflicting claims through either a decision from the District Court or a mediated settlement. The Commonwealth, COFINA, certain COFINA bondholders, and others participated in a mediation process, led by a team of five judges appointed by the District Court. On June 7, 2018, the Commonwealth and the COFINA agents filed a joint motion disclosing the terms of their restructuring agreement in principle and through which the sales and use tax would be apportioned between the Commonwealth and COFINA. Thereafter, on August 29, 2018, COFINA, the Puerto Rico Fiscal Agency and Financial Advisory Authority (known by its Spanish initials "AAFAF"), the Oversight Board, and certain COFINA credit parties entered into a Plan Support Agreement to implement such 2

agreement in principle. The Oversight Board then filed COFINA's Title III Plan of Adjustment and corresponding Disclosure Statement with the District Court on October 19, 2018. On November 8, 2018, the Puerto Rico legislature approved a bill to allow for the implementation of the COFINA restructuring agreement, effective upon the consummation of the COFINA Plan of Adjustment. The District Court approved such Disclosure Statement on November 20, 2018. The District Court has scheduled a hearing on January 16, 2019, to approve COFINA's Title III Plan of Adjustment and settlement of the before-mentioned claims. In Title III case for the Employees Retirement System of the Government of the Commonwealth of Puerto Rico ("ERS"), the Fund received the interest payments on the ERS bonds through and including November 1, 2017. However, with respect to the November 1st interest payment, AAFAF argued before the District Court that the funding by BNYM of such payment was in violation of the automatic stay applicable in ERS s Title III case and demanded that BNYM reverse the payment. On December 28, 2017, the District Court issued an order (the "December 2017 Order") stating that the Joint Stipulation required continued payment of monthly interest on the ERS bonds in the aggregate amount of $13,876,582.48, beyond October 31, 2017, until such date as the District Court issued a decision in the Declaratory Relief Action or the exhaustion of the amounts held in the segregated account for the payments, the latter of which occurred on July 20, 2018. The December 2017 Order also contemplated that the monthly interest payments required thereunder be applied to all series of the ERS bonds, including the capital appreciation bonds that would otherwise not be entitled to current interest, with such payments expressly constituting adequate protection payments for all ERS bondholders, in accordance with the December 2017 Order, PROMESA, and the U.S. Bankruptcy Code. The District Court reserved for future consideration the final allowance and treatment of such adequate protection payments in determining the allowed amount of the claims under the ERS bonds in the ERS Title III case. The District Court dismissed the Declaratory Relief Action on August 17, 2018, ruling against the ERS bondholders and determining, among other things, that they do not possess a perfected security interest over the ERS bondholders' collateral and that any security interest held by the ERS bondholders over their ERS collateral is invalidated and unenforceable. Certain ERS bondholders, including the Fund, have appealed that final judgment to the U.S. Court of Appeals for the First Circuit. In addition to defending the ERS bondholders collateral in the Declaratory Relief Action, now under appeal, certain ERS bondholders also instituted a lawsuit on July 27, 2017, challenging the Puerto Rico Legislature s June 25, 2017 joint resolution purporting to terminate employer contributions to ERS; that litigation remains pending. United States Economy and Markets Over the twelve-month reporting period, U.S. economic data continued to indicate modest growth in the 2.5% to 3.0% range. Job growth remained solid, with employers averaging 210,000 new jobs per month from October 2017 through September 2018. In addition, the national unemployment rate fell to 3.7% in September 2018, compared to 4.2% the prior year. The unemployment rate is at its lowest level since 1969. 3

Higher commodity prices throughout the reporting period brought inflation closer to the 2% level, which represents the Federal Reserve s long-run target. As measured by the U.S. Personal Consumption Expenditure Core Price Index, consumer prices rose 1.9% in the 12 months ended in September 30, 2018. During the Fund s fiscal year, the Federal Reserve continued its gradual tightening of monetary policy, slowly moving away from near-zero short-term interest rates. For the period, the Federal Reserve raised interest rates four times (December 2017, March 2018, June 2018, September 2018). In each case, the Federal Reserve approved a 0.25% increase in its target funds rate. Therefore, the target range has gone from 1.00%-1.25% at the beginning of the Fund s fiscal year to 2.00%-2.25% as of the end of September 2018. As reiterated by the Federal Reserve in recent FOMC statements, the process of normalizing interest rates will continue, but the timing and size of future adjustments will be data-dependent, with the expectation that subsequent increases will continue to be gradual. For the 12-month reporting period, the U.S. Treasury yield curve flattened. Yields went up for all maturities. However, the change in yield was significantly larger for short-term maturities than for intermediate and longer-term maturities. For example, two-year U.S. Treasury yields rose from 1.48% at the beginning of the period, to 2.82% at the end of the period. At the same time, the 10-year U.S. Treasury note went up 73 basis points in yield, from 2.33% to 3.06%. On the long end of the curve, 30-year U.S. Treasuries yielded 3.20% at the end of the Fund s fiscal year, compared to 2.86% at the beginning. On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), which contains an amendment to the U.S. Investment Company Act of 1940, as amended (the "1940 Act"), to repeal the exemption from its coverage of investment companies created under the laws of Puerto Rico, the U.S. Virgin Islands, or any other U.S. possession. The bill amends the 1940 Act by eliminating the exemption provided to U.S. possessions under its Section 6(a)(1). The repeal of the exemption will take effect three (3) years after enactment of the bills. The amendment also provides the U.S. Securities and Exchange Commission ( SEC ) with the authority to extend the three-year safe harbor by up to an additional three (3) years. According to a report issued by the House Financial Services Committee in connection with a similar amendment previously considered by the U.S. House of Representatives, the elimination of the 1940 Act exemption of investment companies headquartered in a U.S. territory would subject them to existing U.S. federal requirements for investment companies, such as registering with the SEC, meeting minimum capital requirements, making disclosures to investors, and registering the securities they offer. Currently, Fund management is evaluating the impact that these additional requirements will have on the Fund and is contemplating seeking guidance from the SEC as to a possible time extension of the threeyear safe harbor. The cost of the mandate will include registration fees and the ongoing costs of complying with SEC requirements. There is no assurance as to what the ultimate impact of this law may be on the Fund or what guidance the SEC may provide in such respect. 4

OUTLOOK The U.S. economic outlook indicates continued growth and low unemployment levels that may lead to higher interest rates. For Puerto Rico, the fiscal situation and the Island s below investment-grade credit ratings remain as big concerns. The combined scenario foreshadows a challenging investment environment for the management of the Fund. Notwithstanding, Banco Popular and UBS Puerto Rico remain committed to providing professional asset management services to the Fund for the benefit of its shareholders. Enrique Vila del Corral, CPA Chairman of the Board and President 5

THE BENEFITS AND RISKS OF LEVERAGING The Puerto Rico Investors Bond Fund I is permitted to use leverage in an amount not to exceed 50% of the Fund's total assets. In addition, the Fund may also borrow for temporary or emergency purposes in an amount of up to an additional 5% of its total assets. The Fund obtains leverage by borrowing, using its investment portfolio as well as securities otherwise obtained as collateral. Leverage can produce additional income when the income derived from investments financed with borrowed funds exceeds the cost of such funds. In such an event, the Fund s net income will be greater than it would be without leverage. If, on the other hand, the income derived from securities purchased with borrowed funds is not sufficient to cover the cost of such funds, the Fund s net income will be less than it would be without leverage. Leverage often increases the risk for shareholders of Common Stock. In addition leverage may have a negative impact on net asset value. Leverage could also increase market price volatility, interest rate and market risk. On the other hand, adding leverage to the Fund could result in higher net income. SHARE REPURCHASE PROGRAM On January 31, 2014, the Board of Directors approved the implementation of a Share Repurchase Program for the acquisition of the Fund's shares of Common Stock (the "Shares"), in open-market transactions at share prices equal to or at a discount of the corresponding NAV per Share, of up to 25% of each Fund's total assets as of such date. The Fund's Share Repurchase Program is implemented on a discretionary basis, under the direction of the co-investment Advisers. The Fund's repurchase activity for each fiscal year is disclosed in the Annual Report to Shareholders attached hereto (see Note 4), as well as the quarterly reports to shareholders. The undertaking of a repurchase program does not obligate the Fund to purchase specific amounts of Shares. During the fiscal year, the Shares continued to experience a period of limited liquidity and/or trading at a discount to their net asset value. Although the holders of the Shares do not have the right to redeem their Shares inasmuch as the Fund is closedended, the Fund may, at its sole discretion, effect repurchases of Shares in the open market, in an attempt to increase the liquidity of the Shares as well as reduce any market discount from their corresponding net asset value. There is no assurance that, if such action is undertaken, it will result in the improvement of the Shares' liquidity or reducing any such market discount. Moreover, while such undertaking may have a favorable effect on the market price of the Shares, the repurchase of the Shares by the Fund will decrease the Fund's total assets and therefore, have the effect of increasing the Fund's expense ratio. Repurchases by the Fund must be conducted in accordance with the terms and conditions contained in Article 10 of Regulation No. 8469 issued by the Puerto Rico Office of the 6

Commissioner of Financial Institutions (the "PROCFI") and procedures adopted by the Fund's Board of Directors to address potential conflicts of interest with affiliated brokerdealers Popular Securities and UBS Financial Services Incorporated of Puerto Rico. Among other things, such regulation and procedures require that to the extent that various sellers indicate interest in selling shares of the Fund, it will purchase such shares starting with the lowest offered price and in the following order of priority for each price: (1) individual and corporate investors, irrespective of the broker-dealer that serves as record owner of the shares to be repurchased; (2) the trading desks of Puerto Rico broker-dealers which are unaffiliated with the Fund; and (3) the trading desks of Popular Securities and UBS Financial Services Incorporated of Puerto Rico. If sellers offer more shares for repurchase than the Fund is able to accept at any particular price for a particular level of priority, repurchase offers will be accepted on a pro-rata basis within that particular level of priority. Additionally, to the extent that Popular Securities or UBS Financial Services Incorporated of Puerto Rico elects to offer the Fund's shares of Common Stock for repurchase from its respective securities inventory, it must do so at its corresponding offer price per share reported to the public. For the fiscal year ended on September 30, 2018, the Fund did not repurchase any shares. Since the program s inception, the Fund has repurchased 12,258,866 shares of its common stock in the open market with a net asset value of $53,626,317, and a cost of $47,492,475, which represent 22.13% of the total assets of the Fund as of January 31, 2014 (net of shares acquired for dividend reinvestment purchases and which remain outstanding). 7

GLOSSARY OF MUTUAL FUND TERMS Bond - Security issued by a government or corporation to those from whom it has borrowed money. A bond usually promises to pay interest income to the bondholder at regular intervals and to repay the entire amount borrowed at maturity date. Realized Gain (Loss) - The profit (loss) from the sale of securities. Realized gains are paid to fund shareholders on a per share basis. When a gain distribution is made, the fund's net asset value drops by the amount of the distribution because the distribution is no longer considered part of the fund's assets. Dividend - A per share distribution of the income earned from the fund's portfolio holdings. When a dividend distribution is made, the fund's net asset value drops by the amount of the distribution because the distribution is no longer considered part of the fund's assets. Interest Rate Swap - An agreement to exchange one interest rate stream for another. No principal changes hands. Investment Adviser - An investment professional who is responsible for managing a portfolio's assets prudently and making appropriate investment decisions, such as which securities to buy, hold and sell, based on the investment objectives of the portfolio. Leverage - Vehicle used by the Fund to increase the amounts available for investment through the issuance of commercial paper or repurchase agreements transactions. Long-Term - An investment with a maturity greater than one year. Mutual Fund - A company which combines the investment money of many people whose financial goals are similar, and invests that money in a variety of securities. A mutual fund allows the smaller investor the benefits of diversification, professional management and constant supervision usually available only to large investors. Net Asset Value (NAV) Per Share - The NAV per share is determined by subtracting a fund's total liabilities from its total assets, and dividing that amount by the number of fund shares outstanding. Offering Price - The offering price of a share of a mutual fund is the price at which the share is sold to the public. Repurchase Agreements - Transactions in which the Fund sells securities to a bank or dealer, and agrees to repurchase them at a mutually agreed date and price. Short-Term - An investment with a maturity of one year or less. Total Investment Return - The change in value of a fund investment over a specified period of time, taking into account the change in a fund's market price and the reinvestment of all fund distributions. Turnover Ratio - The turnover ratio represents the fund's level of trading activity. A fund divides the lesser of purchases or sales (expressed in dollars and excluding all securities with maturities of less than one year) by the fund's average monthly assets. Yield - The annualized rate of income as measured against the current net asset value of fund shares. 8

Puerto Rico Investors Bond Fund I September 30, 2018 Financial Highlights The following table includes selected data for a share outstanding throughout each period and other performance information. For the year ended September 30, 2018 For the year ended September 30, 2017 For the year ended September 30, 2016 For the year ended September 30, 2015 For the year ended September 30, 2014 Increase (Decrease) in Net Asset Value: Per Unit Net asset value, beginning of period $3.42 $3.91 $3.48 $4.60 $4.36 Operating (a) Net investment income 0.12 0.28 0.34 0.46 0.51 Performance: (a) * Net realized (loss) gain and change in unrealized (depreciation) appreciation on investments and derivatives 0.00 (0.47) 0.45 (1.24) 0.06 Total from investment operations 0.12 (0.19) 0.79 (0.78) 0.57 Less: dividends from net investment income applicable to common unitholders (0.18) (0.30) (0.36) (0.46) (0.50) Discount on repurchase of common units - - - 0.12 0.17 Net asset value, end of year $3.36 $3.42 $3.91 $3.48 $4.60 (h) Market value, end of year $2.17 $2.18 $2.81 $2.75 $4.12 Total Investment Return: (g) (b) Based on market value per unit 7.89% (13.39%) 17.35% (23.31%) 7.51% Based on net asset value per unit 6.48% (2.35%) 29.03% (13.08%) 18.92% Ratios: (c) (d) (f) Expenses to average net assets applicable to common unitholders - net of waived fees 3.27% 2.47% 1.94% 1.62% 1.56% (e) (f) Operating expenses to average net assets applicable to common unitholders - net of waived fees 1.52% 1.51% 1.36% 1.21% 1.05% Interest and leverage related expenses to average net assets applicable to common unitholders 1.75% 0.95% 0.58% 0.41% 0.51% (f) Net investment income to average net assets applicable to common unitholders - net of waived fees 3.77% 8.08% 9.47% 11.01% 11.52% Supplemental Net assets applicable to common units, end of period (in thousands) $49,791 $50,638 $57,934 $51,578 $82,451 Data: Portfolio turnover 0.00% 0.00% 16.58% 0.00% 1.25% Portfolio turnover excluding the proceeds from calls and maturities of portfolio securities and the proceeds from mortgage-backed securities paydowns 0.00% 0.00% 1.86% 0.00% 1.25% (a) Based on weekly average outstanding common units of 14,815,298, 14,808,222, 14,803,646, 16,612,415, and 24,321,432 for the years ended September 30, 2018, 2017, 2016, 2015, and 2014, respectively. (b) The return is calculated based on market values provided by UBS Financial Services Incorporated of Puerto Rico, a dealer of the Fund's units and an affiliated party. (c) Based on average net assets applicable to common unitholders of $47,787,790, $52,147,971, $53,504,143, $69,615,839, and $106,628,709 for the years ended September 30, 2018, 2017, 2016, 2015, and 2014, respectively. (d) "Expenses" include both operating and interest and leverage related expenses. (e) "Operating expenses" represents total expenses excluding interest and leverage related expenses. (f) The effect of the expenses waived for the years ended September 30, 2018, 2017, 2016, 2015, and 2014 was to decrease the expense ratios, thus increasing the net investment income ratios to average net assets applicable to common unitholders by 0.66%, 0.58%, 0.55%, 0.59%, and 0.53%, respectively. (g) Dividends are assumed to be reinvested at the per share net asset value as defined in the dividend reinvestment plan. (h) End of period market values are provided by UBS Financial Services Incorporated of Puerto Rico, a dealer of the Fund's units and an affiliated party. The market values shown may reflect limited trading in the units of the Fund in an over-the-counter market. * This is a number that rounds to zero for the year ended September 30, 2018. The accompanying notes are an integral part of these financial statements. 9

Puerto Rico Investors Bond Fund I September 30, 2018 SCHEDULE OF INVESTMENTS Face Amount Issuer Coupon AFICA Bonds - 0.04% of net assets applicable to common units, total cost of $2,790,000 Maturity Date Fair Value $2,790,000 (1) @ ^ Palmas del Mar Country Club Project 7.25% 12/20/30 $20,925 Puerto Rico Agencies - 1.18% of net assets applicable to common units, total cost of $1,163,001 605,000 @ (7) ++ Puerto Rico Highway and Transportation Authority - Revenue Bonds Series K 5.00% 07/01/30 146,712 540,000 @ (9) Puerto Rico Aqueduct and Sewer Authority Series A 6.10% 07/01/34 373,950 85,000 @ (7) ^^ Puerto Rico Industrial Development Company 0.00% 07/01/18 65,748 1,230,000 586,410 Principal Outstanding Amount 22,451,012 Puerto Rico GNMA Taxable - 3.56% of net assets applicable to common units, total cost of $1,710,500 35,199 (2) # GNMA P/I (Pool 470963) 7.50% 10/15/28 35,474 46,926 (2) GNMA P/I (Pool 470956) 7.00% 12/15/28 47,501 31,404 (2) GNMA P/I (Pool 487365) 7.00% 12/15/28 33,504 113,518 (2) # GNMA P/I (Pool 487379) 7.00% 01/15/29 120,854 45,088 (2) # GNMA P/I (Pool 494960) 7.00% 01/15/29 45,570 120,566 (2) # GNMA P/I (Pool 494961) 7.00% 01/15/29 128,759 64,867 (2) GNMA P/I (Pool 487410) 7.00% 02/15/29 66,287 65,793 (2) # GNMA P/I (Pool 487411) 7.00% 02/15/29 67,256 24,305 (2) GNMA P/I (Pool 494963) 7.00% 02/15/29 24,347 27,783 (2) GNMA P/I (Pool 494964) 7.00% 02/15/29 27,831 44,155 (2) # GNMA P/I (Pool 494983) 7.00% 02/15/29 44,603 33,020 (2) GNMA P/I (Pool 494985) 7.00% 02/15/29 33,204 31,205 (2) GNMA P/I (Pool 500593) 7.00% 02/15/29 31,336 54,191 (2) GNMA P/I (Pool 494992) 7.50% 02/15/29 55,153 76,752 (2) # GNMA P/I (Pool 487434) 7.00% 03/15/29 78,678 59,182 (2) GNMA P/I (Pool 494982) 7.00% 03/15/29 60,335 54,404 (2) GNMA P/I (Pool 494986) 7.00% 03/15/29 55,211 165,444 (2) # GNMA P/I (Pool 494988) 7.00% 03/15/29 176,760 39,228 (2) GNMA P/I (Pool 494989) 7.00% 03/15/29 39,543 93,181 (2) # GNMA P/I (Pool 494990) 7.00% 03/15/29 96,205 39,998 (2) GNMA P/I (Pool 495016) 7.00% 04/15/29 40,325 28,110 (2) # GNMA P/I (Pool 495020) 7.00% 04/15/29 28,159 73,362 (2) # GNMA P/I (Pool 495027) 7.00% 04/15/29 74,710 1,535 (2) GNMA P/I (Pool 487490) 7.00% 05/15/29 1,536 54,175 (2) # GNMA P/I (Pool 487491) 7.00% 05/15/29 54,981 53,425 (2) GNMA P/I (Pool 487496) 7.00% 05/15/29 54,213 125,296 (2) # GNMA P/I (Pool 487503) 7.00% 05/15/29 133,754 108,262 (2) # GNMA P/I (Pool 487505) 7.00% 05/15/29 115,666 1,710,374 1,771,755 Puerto Rico GNMA Exempt - 12.52% of net assets applicable to common units, total cost of $5,655,215 81,698 (2) GNMA SERIAL (Pool 401471 U.61-100) 7.50% 12/15/24 89,022 118,985 (2) GNMA SERIAL (Pool 425498 U.61-100) 7.50% 12/15/24 129,652 119,944 (2) GNMA SERIAL (Pool 425497 U.61-100) 7.50% 01/15/25 130,697 37,097 (2) GNMA SERIAL (Pool 397416 U.61-100) 7.50% 05/15/25 40,423 89,244 (2) GNMA SERIAL (Pool 397428 U.61-100) 7.50% 07/15/25 97,245 144,614 (2) GNMA SERIAL (Pool 407856 U.61-100) 7.50% 08/15/25 157,579 65,676 (2) GNMA SERIAL (Pool 411897 U.61-100) 7.50% 09/15/25 71,564 159,811 (2) GNMA SERIAL (Pool 417909 U.61-100) 7.50% 09/15/25 174,138 77,437 (2) GNMA SERIAL (Pool 407872 U.61-100) 7.50% 11/15/25 84,379 57,161 (2) GNMA SERIAL (Pool 407874 U.61-100) 7.50% 11/15/25 62,285 71,138 (2) GNMA SERIAL (Pool 425505 U.61-100) 7.50% 11/15/25 77,516 72,469 (2) GNMA SERIAL (Pool 425508 U.61-100) 7.50% 11/15/25 78,966 47,141 (2) GNMA SERIAL (Pool 417928 U.61-100) 7.50% 12/15/25 51,367 129,185 (2) GNMA SERIAL (Pool 420135 U.76-100) 7.00% 06/15/26 141,574 157,099 (2) GNMA SERIAL (Pool 437566 U.76-100) 7.00% 08/15/26 172,165 191,414 (2) GNMA SERIAL (Pool 437598 U.84-100) 7.00% 10/15/26 209,771 108,579 (2) GNMA SERIAL (Pool 437629 U.76-100) 7.50% 01/15/27 118,313 184,653 (2) GNMA SERIAL (Pool 448422 U.1-100) 7.00% 02/15/27 202,361 134,719 (2) GNMA SERIAL (Pool 437628 U.76-100) 7.50% 02/15/27 146,797 93,655 (2) GNMA SERIAL (Pool 449304 U.1-100) 7.00% 04/15/27 102,637 107,746 (2) GNMA SERIAL (Pool 449306 U.1-100) 7.00% 05/15/27 118,079 94,341 (2) GNMA SERIAL (Pool 449307 U.11-100) 7.00% 06/15/27 103,388 156,273 (2) GNMA SERIAL (Pool 449320 U.76-100) 7.00% 06/15/27 171,260 198,279 (2) GNMA SERIAL (Pool 449322 U.76-100) 7.00% 07/15/27 217,294 145,526 (2) GNMA SERIAL (Pool 449324 U.76-100) 7.50% 07/15/27 158,572 73,791 (2) GNMA SERIAL (Pool 495082 U.81-97 & 100) 6.00% 10/15/29 83,174 87,940 (2) GNMA SERIAL (Pool 515517 U.79-100) 6.50% 11/15/30 98,352 95,885 (2) GNMA SERIAL (Pool 515537 U.87-100) 6.50% 12/15/30 107,238 68,281 (2) GNMA SERIAL (Pool 529775 U.88-100) 6.50% 01/15/31 76,366 90,552 (2) GNMA SERIAL (Pool 528557 U.67-100) 7.00% 01/15/31 99,236 91,207 (2) GNMA SERIAL (Pool 529903 U.73-100) 6.50% 06/15/31 102,006 63,164 (2) GNMA SERIAL (Pool 529911 U.82-100) 6.50% 06/15/31 70,643 146,840 (2) GNMA SERIAL (Pool 529933 U.70-100) 6.50% 07/15/31 164,226 296,869 (2) GNMA SERIAL (Pool 529936 U.61-100) 6.50% 07/15/31 332,018 286,826 (2) GNMA SERIAL (Pool 529937 U.62-100) 6.50% 07/15/31 320,786 444,869 (2) GNMA SERIAL (Pool 554086 U.84-100) 6.50% 01/15/32 497,541 273,339 (2) GNMA SERIAL (Pool 568320 U.91-100) 6.50% 01/15/32 305,702 226,064 (2) GNMA SERIAL (Pool 568337 U.83-100) 6.50% 08/15/32 252,830 550,768 (2) GNMA SERIAL (Pool 528153 U.68-100) 5.50% 04/15/34 618,044 5,640,279 6,235,206 Puerto Rico Freddie Mac Taxable - 0.57% of net assets applicable to common units, total cost of $263,408 288 (3) FGLMC (Pool C22503) 7.00% 01/01/29 288 57,715 (3) FGLMC (Pool C32273) 7.00% 10/01/29 58,864 205,404 (3) # FGLMC (Pool A50498) 6.00% 07/01/36 223,262 263,407 282,414 The accompanying notes are an integral part of these financial statements. 10

Puerto Rico Investors Bond Fund I September 30, 2018 SCHEDULE OF INVESTMENTS (concluded) Principal Outstanding Amount Issuer Coupon Puerto Rico Fannie Mae Taxable - 4.37% of net assets applicable to common units, total cost of $2,059,672 Maturity Date Fair Value 16,790 (5) FNMA (Pool 441414) 7.00% 09/01/28 $16,900 20,360 (5) FNMA (Pool 445573) 7.00% 10/01/28 20,373 21,459 (5) FNMA (Pool 445580) 7.00% 11/01/28 21,435 75,260 # (5) FNMA (Pool 445589) 6.50% 12/01/28 82,511 15,453 (5) FNMA (Pool 445590) 7.00% 12/01/28 16,462 73,752 (5) FNMA (Pool 483685) 7.50% 12/01/28 78,763 36,366 # (5) FNMA (Pool 445598) 7.00% 01/01/29 36,571 87,252 # (5) FNMA (Pool 488054) 7.00% 03/01/29 89,690 151,925 # (5) FNMA (Pool 488057) 7.00% 03/01/29 162,023 130,581 # (5) FNMA (Pool 488064) 7.00% 03/01/29 139,145 30,266 (5) FNMA (Pool 488060) 7.50% 03/01/29 30,343 141,983 # (5) FNMA (Pool 504170) 8.00% 09/01/29 149,294 34,958 # (5) FNMA (Pool 536020) 8.50% 05/01/30 39,010 13,561 (5) FNMA (Pool 536024) 8.50% 05/01/30 14,377 17,133 (5) FNMA (Pool 536042) 8.00% 09/01/30 18,931 65,987 (5) FNMA (Pool 573429) 7.00% 03/01/31 70,800 1,126,585 # (5) FNMA (Pool 849999) 5.00% 01/01/36 1,186,894 2,059,671 2,173,522 Puerto Rico Collateralized Mortgage Obligations Taxable - 0.64% of net assets applicable to common units, total cost of $475,175 475,175 (6) Doral Fixed Rate Conventional Mortgage (Pool 2004-A) 6.69% 04/01/34 319,983 Puerto Rico Tax Exempt Notes - 1.38% of net assets applicable to common units, total cost of $672,144 82,031 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 487557) 7.00% 07/15/29 84,283 56,467 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 487559) 7.00% 07/15/29 57,604 35,146 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 508624) 7.00% 07/15/29 35,378 36,956 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 508630) 7.00% 07/15/29 37,227 44,298 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 508631) 7.00% 07/15/29 44,952 81,044 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 508642) 7.00% 08/15/29 83,254 34,546 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 514581) 7.00% 08/15/29 34,766 18,687 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 514582) 7.00% 08/15/29 18,917 36,407 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 514603) 7.00% 09/15/29 36,775 97,003 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 514604) 7.00% 09/15/29 99,789 29,479 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 514605) 7.00% 09/15/29 29,531 96,393 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 509243) 7.50% 10/15/29 100,462 23,680 (4) Community Endowment, Inc. (Collateralized by GNMA Pool 509244) 7.50% 10/15/29 24,223 672,137 687,161 Face Amount Puerto Rico Government Instrumentalities Tax Exempt Notes - 43.91% of net assets applicable to common units, total cost of $30,404,512 8,255,000 @ (7) (8) +++ * Employees Retirement System - Senior Pension Funding Bonds Series B 0.00% 07/01/34 941,730 1,405,000 @ (7) (8) +++ Employees Retirement System - Senior Pension Funding Bonds Series A 6.15% 07/01/38 447,844 85,000 @ (7) (8) +++ Employees Retirement System - Senior Pension Funding Bonds Series B 6.30% 07/01/38 27,094 735,000 @ (7) (8) +++ Employees Retirement System - Senior Pension Funding Bonds Series A 6.20% 07/01/40 234,281 410,000 @ (7) * Puerto Rico Sales Tax Financing Corp Appreciation Bonds 2008 Series A 0.00% 08/01/24 211,695 7,655,000 @ (7) * Puerto Rico Sales Tax Financing Corp Appreciation Bonds 2008 Series A 0.00% 08/01/25 3,717,268 7,640,000 @ (7) * Puerto Rico Sales Tax Financing Corp Appreciation Bonds 2008 Series A 0.00% 08/01/26 3,489,264 8,645,000 @ (7) * Puerto Rico Sales Tax Financing Corp Appreciation Bonds 2008 Series A 0.00% 08/01/27 3,713,287 9,885,000 @ (7) * Puerto Rico Sales Tax Financing Corp Appreciation Bonds 2007 Series B 0.00% 08/01/29 3,746,711 14,105,000 @ (7) * Puerto Rico Sales Tax Financing Corp Appreciation Bonds 2008 Series A 0.00% 08/01/35 3,708,628 3,320,000 @ (7) + Puerto Rico Sales Tax Financing Corp Revenue Bonds 2009 Series A 6.00% 08/01/42 1,626,800 62,140,000 21,864,602 US Government Sponsored Entities - 98.35% of net assets applicable to common units, total cost of $46,821,062 6,675,000 # Federal Farm Credit Bank 5.13% 11/28/22 7,225,227 1,650,000 # Federal Farm Credit Bank 5.20% 02/06/26 1,858,345 100,000 Federal Farm Credit Bank 2.90% 05/16/31 89,573 @ 6,000,000 @ # Federal Home Loan Bank Bonds 2.65% 08/16/32 5,252,730 2,400,000 @ # Federal Home Loan Bank Bonds 3.13% 04/28/36 2,158,762 300,000 @ Federal Home Loan Bank Bonds 3.00% 05/23/36 264,992 23,040,000 # Federal Home Loan Bank Bonds 5.50% 07/15/36 29,270,823 2,000,000 # Federal Home Loan Bank Bonds 2.79% 08/08/36 1,711,702 1,350,000 @ # Federal Home Loan Bank Bonds 2.70% 10/17/36 1,138,200 43,515,000 48,970,354 US Municipal Obligations - 15.36% of net assets applicable to common units, total cost of $7,077,447 6,450,000 @ # State of California - Various Purpose General Obligation Bonds 7.95% 03/01/36 6,875,055 530,000 @ # State of California - Various Purpose General Obligation Bonds 7.63% 03/01/40 771,760 6,980,000 7,646,815 Total investments (181.88% of net assets applicable to common units) 90,559,147 Liabilities minus other assets (-81.88% of net assets applicable to common units) (40,767,735) Net assets attributable to common units - 100% $49,791,412 (1) AFICA - Puerto Rico Industrial, Tourism, Medical, Educational, and Environmental Pollution Control Facilities Financing Authority. Revenue bonds are payable solely from cash flows generated by the underlying project, which do not constitute an indebtness of the Commonwealth of PR or any of its political subdivisions, other than AFICA. (2) Puerto Rico GNMA - Represents mortgage-backed obligations guaranteed by the Government National Mortgage Association. They are subject to principal paydowns as a result of prepayments or refinancing of the underlying mortgage instruments. As a result, the average life may be substantially less than the original maturity. (3) Puerto Rico Freddie Mac Taxable - Represents mortgage-backed obligations guaranteed by the Federal Home Loan Mortgage Corporation. They are subject to principal paydowns as a result of prepayments or refinancing of the underlying mortgage instruments. As a result, the average life may be substantially less than the original maturity. (4) Community Endowment - These obligations are collateralized by mortgage-backed securities and the only source of repayment is the collateral. They are subject to principal paydowns as a result of prepayments or refinancing of the underlying mortgage instruments. As a result, the average life may be substantially less than the original maturity. (5) Puerto Rico Fannie Mae Taxable- Represents mortgage-backed obligations guaranteed by the Federal National Mortgage Association. They are subject to principal paydowns as a result of prepayments or refinancing of the underlying mortgage instruments. As a result, the average life may be substantially less than the original maturity. (6) Investment in a participation certificate of a group of conventional residential mortgages. The pool has mortgage loans with payment in arrears that have been advanced by the servicer pursuant to a guarantee of timely payment of principal and interest. They are subject to principal paydowns as a result of prepayments or refinancing of the underlying mortgage instruments. As a result, the average life may be substantially less than the original maturity. (7) Revenue Bonds - issued by agencies and payable from revenues and other sources of income of the agency as specified in the applicable prospectus. These obligations are not an obligation of the Commonwealth of Puerto Rico. (8) These bonds are limited, non-recourse obligations of the Employees Retirement System payable solely from, and secured solely by, employer contributions made after the date of issuance of the bonds. (9) Guaranteed by the Commonwealth of Puerto Rico. # A portion or all of the security has been pledged as collateral for securities sold under agreements to repurchase. @ Security may be called before its maturity date. ^ AFICA Palmas del Mar Country Club Project has defaulted on its monthly interest payment of $16,856 since July 20, 2016. + Puerto Rico Sales Tax Financing Corporation has its interest payments on hold since June 1, 2017 pending litigation. For this reason, these securities are not accruing interest income since May 1, 2017, representing $199,200 for the current year. ++ Puerto Rico Highways Transportation Authority defaulted on its semi-annual interest payment since July 1, 2017. For this reason, this security is not accruing interest income, representing $30,250 for the current year. +++ On August 17, 2018, the District Court ruled against the ERS bondholders and determined that they do not possess a perfected security interest over the ERS bondholders' collateral and that any security interest held by the ERS bondholders over their ERS collateral is invalidated and unenforceable. See Note 13 for further details. ^^ Puerto Rico Industrial Development Company defaulted on its principal payment on July 1, 2018. * For Financial Statement purposes these securities are not accreting, representing interest of $1,619,284 for the current year. The accompanying notes are an integral part of these financial statements. 11

Puerto Rico Investors Bond Fund I September 30, 2018 STATEMENT OF ASSETS AND LIABILITIES Assets: Investments in securities: Securities pledged as collateral under repurchase agreements, at fair value, (cost - $42,351,482) $44,296,849 Other securities, at fair value (cost - $56,740,654) 46,262,298 $90,559,147 Cash and cash equivalents 177,056 Interest receivable 595,014 Other assets 53,501 Total assets 91,384,718 Liabilities: Securities sold under agreements to repurchase 41,176,064 Payables: Dividend payable 141,997 Interest 24,596 Investment advisory fees 19,011 Administration fees 11,407 197,011 Accrued expenses and other liabilities 220,231 Total liabilities 41,593,306 Net Assets Applicable to Common Units: $49,791,412 Net Assets Balance applicable to 14,817,086 units of fractional undivided interest outstanding $186,780,131 Consist of: Undistributed net investment income 3,350,294 Accumulated net realized loss on investments (131,806,024) Unrealized net depreciation on investments (8,532,989) Net assets applicable to common units $49,791,412 Net asset value applicable to common units - per unit; 14,817,086 units outstanding $3.36 The accompanying notes are an integral part of these financial statements. 12

Puerto Rico Investors Bond Fund I STATEMENT OF OPERATIONS For the year ended September 30, 2018 Investment income: Interest $3,362,955 Expenses: Interest and leverage related expenses 836,508 Investment advisory fees 541,696 Administration fees 135,424 Professional fees 233,571 Directors' fees and expenses 28,500 Insurance expense 68,475 Printing and shareholder reports 4,584 Other 28,652 Total expenses 1,877,410 Waived investment advisory fees (315,988) Net expenses after fees waived by investment advisers 1,561,422 Net investment income: 1,801,533 Realized Gain (Loss) & Unrealized Appreciation (Depreciation) on Change in unrealized depreciation on investments 62,926 Investments: Total net gain on investments 62,926 Net increase in net assets resulting from operations $1,864,459 The accompanying notes are an integral part of these financial statements. 13

Puerto Rico Investors Bond Fund I STATEMENTS OF CHANGES IN NET ASSETS Increase (Decrease) in Net Assets: For the year ended September 30, 2018 For the year ended September 30, 2017 Operations: Net investment income $1,801,533 $4,212,728 Net realized loss on investments - (7,514,938) Change in unrealized depreciation on investments 62,926 426,661 Net increase (decrease) in net assets resulting from operations 1,864,459 (2,875,549) Distributions to Common Unitholders from: Dividends from net investment income (2,728,389) (4,442,417) Units Transactions: Reinvestment of dividends on common units 17,018 21,943 Increase in net assets derived from common units transactions 17,018 21,943 Net Assets: Net decrease in net assets attributable to common units (846,912) (7,296,023) Balance at beginning of the year 50,638,324 57,934,347 Balance at end of the year $49,791,412 $50,638,324 The accompanying notes are an integral part of these financial statements. 14

Puerto Rico Investors Bond Fund I STATEMENT OF CASH FLOWS Increase (Decrease) in Cash For the year ended September 30, 2018 Cash Provided by Net increase in net assets resulting from operations $1,864,459 Operating Activities: Adjusted by: Proceeds from mortgage-backed securities paydowns 1,770,547 Net realized loss on paydowns 415 Change in unrealized depreciation on investments (62,926) Accretion of discounts on investments (88,091) Amortization of premiums on investments 208,004 Decrease in interest and dividends receivable 20,644 Decrease in other assets 627 Increase in interest payable 17,041 Decrease in investment advisory fees payable (364) Decrease in administration fees payable (218) Increase in accrued expenses and other liabilities 88,212 Total cash provided by operating activities 3,818,350 Cash Used in Repurchase agreements related repayments; net of issuances of $1,121,678,455 (900,947) Financing Activities: Dividends to common unitholders paid in cash (2,884,124) Total cash used in financing activities (3,785,071) Cash: Net increase in cash and cash equivalents 33,279 Cash and cash equivalents at beginning of year 143,777 Cash and cash equivalents at end of year $177,056 Cash Flow Cash paid for interest and leverage related expenses $819,467 Information: Non-cash activities: Dividends reinvested by common unitholders $17,018 The accompanying notes are an integral part of these financial statements. 15

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS Note 1 - Reporting Entity and Significant Accounting Policies: The Puerto Rico Investors Bond Fund I (the Fund ), an investment trust organized under the laws of the Commonwealth of Puerto Rico, is a non-diversified closed-end management investment company registered under the Puerto Rico Investment Companies Act of 1954, as amended. The Fund was created pursuant to an agreement and deed of trust entered into by and between Popular Securities, LLC ( Popular Securities ) and UBS Financial Services Incorporated of Puerto Rico ( UBS Puerto Rico ) as settlers, and their affiliates, Banco Popular de Puerto Rico ( Banco Popular ) and UBS Trust Company of Puerto Rico, as trustees (the Trustees ). The Fund s investment objective is to achieve a high level of tax-advantaged current income consistent with the preservation of capital. The Fund is an investment company that applies the accounting and reporting guidance in the Financial Accounting Standards Board ( FASB ) Accounting Standards Codification Topic 946, Financial Services Investment Companies ( ASC 946 ). The financial statements are prepared in accordance with United States ( US ) generally accepted accounting principles ( GAAP ), which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements: (a) Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits and funds invested in shortterm investments with original maturities of 90 days or less. Cash and cash equivalents are valued at amortized cost, which approximates fair value. At September 30, 2018, cash and cash equivalents consisted of a time deposit open account amounting to $177,056 with Banco Popular de Puerto Rico, which is an affiliated entity. (b) Valuation of Investments - Investments included in the Fund s financial statements have been stated at fair values as determined by Banco Popular de Puerto Rico, as the Fund's administrator, with the assistance of the Investment Advisers (Refer to Note 3 for details on investment agreements), on the basis of valuations provided by dealers or by pricing services, which are approved by the Fund s management and the Board of Directors, in accordance with the valuation methods set forth in the Governing Documents (Prospectus and Valuation Committee) and related policies and procedures. See Note 2 for further discussions regarding fair value disclosures. (c) Taxation - The Fund has elected to be treated as a registered investment company under the Puerto Rico Internal Revenue Code of 2011, as amended, and the regulations and administrative pronouncements promulgated thereunder. As a registered investment company under the Puerto Rico Investment Companies Act, the Fund will not be subject to Puerto Rico ( PR ) income tax for any taxable year if it distributes at least 90% of its taxable net investment income for such year, as determined for these purposes. Accordingly, as the Fund intends to meet this distribution requirement, the income earned by the Fund is not subject to Puerto Rico income tax at the Fund level. The Fund has never been subject to taxation. In addition, the fixed income and equity investments of the Fund are exempt from Puerto Rico personal property taxes. The Fund is exempt from United States income taxes, except for dividends received from United States sources, which are subject to a 10% United States withholding tax, if certain requirements are met. Dividend income is recorded net of taxes. In the opinion of the Fund's legal counsel, the Fund is not required to file a U.S. federal income tax return. 16

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS GAAP requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund s tax return to determine whether the tax positions are more-likely-than-not of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund s tax positions taken on its Puerto Rico income tax returns for all open tax years (the current and prior three tax years) and has concluded that no liability should be recorded related to uncertain tax positions taken on returns filed for open tax years. On an ongoing basis, management will monitor the Fund's tax position to determine if adjustments to this conclusion are necessary. The balance of undistributed net investment income and of accumulated net realized loss on investments and derivatives reflect the reclassification of permanent differences and temporary differences between book and tax balances that becomes permanent. As a result of these reclassifications, the amounts shown in the Statement of Assets and Liabilities reflect the amounts for tax purposes, except for remaining temporary differences, if any (See Note 11). (d) Statement of Cash Flows The Fund invests in securities and distributes dividends from net investment income, which are paid in cash or are reinvested at the discretion of common unitholders. These activities are reported in the Statement of Changes in Net Assets. Additional information on cash receipts and payments is presented in the Statement of Cash Flows. Accounting practices that do not affect the reporting of activities on a cash basis include carrying investments at value and amortizing premiums or discounts on debt obligations. (e) Dividends and Distributions to Unitholders - Dividends from net investment income are declared and paid monthly. The Fund may at times pay out less than the entire amount of net investment income earned in any particular period and may at times pay out such accumulated undistributed income earned in other periods in order to permit a more stable level of distribution. The Fund records dividends to its unitholders on the ex-dividend date. The Fund does not expect to make distributions of net realized capital gains, if and when available, although the Fund s Board of Directors reserves the right to do so in its sole discretion. (f) Securities Sold under Agreements to Repurchase - Under these agreements, the Fund sells securities, receives cash in exchange and agrees to repurchase the securities at a mutually agreed date and price. Ordinarily, those counterparties with which the Fund enters into these agreements require delivery of collateral, nevertheless, the Fund retains ownership of the collateral through the agreement that requires the repurchase and return of such collateral. These transactions are treated as financings and recorded as liabilities. Therefore, no gain or loss is recognized on the transaction and the securities pledged as collateral remain recorded as assets of the Fund. These agreements involve the risk that the market value of the securities purchased with the proceeds from the sale of securities received by the Fund may decline below the price of the securities that the Fund is obligated to repurchase and that the value of the collateral posted by the Fund increases in value and the counterparty does not return it. 71Because the Fund borrows under repurchase agreements based on the estimated fair value of the pledged assets, the Fund s ongoing ability to borrow under its repurchase facilities may be limited and its lenders may initiate margin calls in the event of adverse changes in the market. A decrease in market value of the pledged assets may require the Fund to post additional collateral or otherwise sell assets at a time when it may not be in the best interest of the Fund to do so (See Note 6). (g) Short-term notes - The Fund has a short-term notes payable program as a funding vehicle to increase the amount available for investments. The short-term notes are issued from time to time in denominations of $25,000 maturing in periods of up to 270 days. The notes are collateralized by the pledge of certain securities of the Fund. The pledged securities are held by Banco Popular de Puerto Rico (the Custodian), as collateral agent, for the benefit of the holders of the notes. There were no short-term notes outstanding during the year ended September 30, 2018. 17

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS (h) Paydowns Realized gains and losses on mortgage-backed securities paydowns are recorded as an adjustment to interest income as required by GAAP. For the year ended September 30, 2018, the Fund decreased interest income in the amount of $415 related to net realized loss on mortgage-backed securities paydowns. For purposes of dividend distributions, net investment income excludes the effect of mortgage-backed securities paydowns gains and losses (See Note 11). (i) Other - Security transactions are accounted for on the trade date (the date the order to buy or sell is executed). Realized gains and losses on security transactions are determined based on the identified cost method. Premiums and discounts on securities purchased are amortized over the life or the expected life of the respective securities using the effective interest method. Interest and dividend income on preferred equity securities are accrued daily except when collection is not expected. Dividend income on common equity securities is recorded on the exdividend date. Note 2 Fair Value Measurements: Under GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. GAAP establishes a fair value hierarchy that prioritizes the inputs and valuation techniques used to measure fair value into three levels in order to increase consistency and comparability in fair value measurements and disclosures. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for the fair value measurement are observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect the Fund s estimates about assumptions that market participants would use in pricing the asset or liability based on the best information available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Valuation on these instruments does not need a significant degree of judgment since valuations are based on quoted prices that are readily available in an active market. Level 2 Quoted prices other than those included in Level 1 that are observable either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or that can be corroborated by observable market data for substantially the full term of the financial instrument. Level 3 Unobservable inputs are significant to the fair value measurement. Unobservable inputs reflect the Fund s own assumptions about assumptions that market participants would use in pricing the asset or liability. The Fund maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing on those securities. Fair value is based upon quoted market prices when available. If listed price or quotes are not available, the Fund employs internally developed models that primarily use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. Valuation adjustments are limited to those necessary to ensure that the financial instrument s fair value is adequately representative of the price that would be received or paid in the marketplace. These adjustments include amounts that reflect counterparty credit quality, constraints on liquidity, and unobservable parameters that are applied consistently. 18

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS The estimated fair value may be subjective in nature and may involve uncertainties and matters of significant judgment for certain financial instruments. Changes in the underlying assumptions used in calculating fair value could significantly affect the results. In addition, the fair value estimates are based on outstanding balances without attempting to estimate the value of anticipated future business. Therefore, the estimated fair value may materially differ from the value that could actually be realized on a sale. The Fund monitors the portfolio securities to ensure they are in the correct hierarchy level. On November 8, 2013, the Board of Directors of the Fund delegated to the Valuation Committee, comprised of voting members of Popular Asset Management, a division of Banco Popular, and UBS Asset Managers of PR, a division of UBS Trust Company of PR, certain procedures and functions related to the valuation of portfolio securities for the purpose of determining the Net Asset Value of the Fund. The Valuation Committee is generally responsible for determining the fair value of the following types of portfolio securities: - Portfolio instruments for which no price or value is available at the time the Fund s NAV is calculated on a particular day; - Portfolio instruments for which the prices or values available do not, in the judgment of the Investment Advisers, represent the fair value of the portfolio instruments; - A price of a portfolio instrument that has not changed for four consecutive weekly pricing periods, except for Puerto Rico taxable securities and U.S. portfolio instruments; - Any PR taxable securities and the U.S. portfolio instruments whose value has not changed from the previous weekly pricing period. Following is a description of the Fund s valuation methodologies used for assets and liabilities measured at fair value: AFICA bonds: The fair value of AFICA bonds is based on quotes obtained from local brokers. AFICA bonds are segregated and the like characteristics divided into specific sectors. Market inputs used in the evaluation process include all or some of the following: trades, bid price or spread, quotes, benchmark curves including but not limited to Treasury benchmarks, LIBOR and swap curves, and discount and capital rates. These bonds are classified as Level 2. Mortgage and other asset-backed securities: Certain agency mortgage and other assets-backed securities ( MBS ) are priced based on a bond s theoretical value derived from the prices of similar bonds; similar being defined by credit quality and market sector. Their fair value incorporates an option adjusted spread. GNMA Puerto Rico Serials are priced using a pricing matrix with quoted prices from local broker dealers, based on trade activity in local markets and is compared with data from exchange platforms where similar instruments regularly trade. The agency MBS and GNMA Puerto Rico Serials are classified as Level 2. Collateralized Mortgage Obligations: Agency and private collateralized mortgage obligations ( CMOs ) are priced based on a bond s theoretical value derived from the prices of similar bonds; similar being defined by credit quality and market sector. Their fair value incorporates an option adjusted spread. The option adjusted spread includes prepayment and volatility assumptions, ratings (whole loans collateral) and spread adjustments. CMOs include a significant adjustment based on assumptions important to market participants, such as credit risk, source of payment, etc. There is a lack of transparency of prices due to lack of trading activity. These securities are classified as Level 3. Puerto Rico Tax Exempt Notes: Prices for these securities are obtained from broker quotes. These securities trade in over-the-counter markets. Quoted prices are based on recent trading activity for similar instruments and do 19

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS not trade in highly liquid markets. Community Endowments are generally classified as Level 2 and the pricing is based on their collateral. Obligations of Puerto Rico and political subdivisions: Obligations of Puerto Rico and political subdivisions are segregated and the like characteristics divided into specific sectors. Market inputs used in the evaluation process include all or some of the following: trades, bid price or spread, quotes, benchmark curves including but not limited to Treasury benchmarks, LIBOR and swap curves, and discount and capital rates. These bonds are classified as Level 2. Obligations of U.S. Government Sponsored Entities, State, and Municipal Obligations: The fair value of Obligations of U.S. Government sponsored entities, state and municipal obligations is obtained from third-party pricing service providers that use a pricing methodology based on an active exchange market and based on quoted market prices for similar securities. These securities are classified as Level 2. U.S. agency structured notes are priced based on a bond s theoretical value from similar bonds defined by credit quality and market sector, and for which the fair value incorporates an option adjusted spread in deriving their fair value. These securities are classified as Level 2. The following is a summary of the levels within the fair value hierarchy in which the Fund invests based on inputs used to determine the fair value of such securities: Hierarchy Level 1 Level 2 Level 3 Balance at 9/30/2018 Assets: AFICA Bonds $ - $ 20,925 $ - $ 20,925 Puerto Rico Agencies - 586,410-586,410 Mortgage-Backed Securities: Puerto Rico GNMA Taxable - 1,771,755-1,771,755 Puerto Rico GNMA Exempt - 6,235,206-6,235,206 Puerto Rico Freddie Mac Taxable - 282,414-282,414 Puerto Rico Fannie Mae Taxable - 2,173,522-2,173,522 Puerto Rico Collateralized Mortgage Oblig. Taxable - - 319,983 319,983 Puerto Rico Tax Exempt Notes - 687,161-687,161 Puerto Rico Govt. Instrumentalities Tax Exempt Notes - 21,864,602-21,864,602 US Government Sponsored Entities - 48,970,354-48,970,354 US Municipal Obligations - 7,646,815-7,646,815 Total $ - $ 90,239,164 $ 319,983 $ 90,559,147 Temporary cash investments, if any, are valued at amortized cost, which approximates fair value. The following is a reconciliation of assets for which Level 3 inputs were used in determining fair value: Balance as of 9/30/2017 Realized gain (loss) Change in Unrealized (depreciation)/ appreciation Sales Paydowns Transfers in (out) to Level 3 Balance as of 9/30/2018 Doral Fixed Rate Conventional Mortgage (Pool 2004-A) 6.69% due 4/1/34 $356,420 $827 $(9,117) $ - $(28,147) $ - $ 319,983 20

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS Transfers to Level 3 reflect securities where there is a lack of transparency of prices due to lack of trading activity for these securities or comparable securities. As a result, significant unobservable inputs had to be used to determine the fair value of the security. The Fund s policy is to recognize transfers in and transfers out as of the end of the reporting period of the event or change in circumstances that caused the transfer. There were no transfers in/out during the year ended September 30, 2018. Quantitative Information about Level 3 Fair Value Measurements: Fair Value at September 30, 2018 Valuation Technique Unobservable Inputs Price Doral Fixed Rate Conventional Mortgage (Pool 2004-A) 6.69% due 4/1/34 $319,983 Third Party Vendor Evaluated Quotes $67.34 Changes in the unrealized gains and losses included in the Statement of Operations relating to investments classified as Level 3 that are still held at September 30, 2018, amounted to a net unrealized depreciation of $9,117. Note 3 - Investment Advisory, Administrative, Custodian, Transfer Agency Arrangements, and Other Transactions with Affiliates: Pursuant to separate Investment Advisory Agreements with UBS Asset Managers of Puerto Rico, a division of UBS Trust Company of Puerto Rico, and Banco Popular de Puerto Rico ( Banco Popular ) (collectively, the Investment Advisers ), the Fund receives advisory services in exchange for a fee. The investment advisory fee is calculated at an annual rate of 0.60% of the Fund s average weekly gross assets, as defined in the agreement. For the year ended September 30, 2018, the gross investment advisory fees amounted to $541,696. Total waived fees amounted to $315,988 for a net fee of $225,708. Banco Popular provides administrative, custody, and transfer agency services pursuant to separate Administration, Custodian, and Transfer Agency Agreements. Under the terms of the Administration Agreement, Banco Popular provides facilities and personnel to the Fund for the performance of the administrator duties. The fees related to these services are calculated at an annual rate of 0.15% of the Fund s average weekly gross assets, as defined in the agreements. For the year ended September 30, 2018, the gross fees for such services amounted to $135,424. The Fund is not registered under the U.S. Investment Company Act of 1940, as amended, and therefore is not subject to the restrictions contained therein regarding, among other things, transactions between the Fund, Banco Popular, and UBS Financial Services Incorporated of Puerto Rico ( UBS Puerto Rico ) or their affiliates ("Affiliated Transactions"). In that regard, the Board of Directors of the Fund adopted a set of Procedures for Affiliated Transactions ("Procedures") in an effort to address potential conflicts of interest that may arise. It is anticipated that Affiliated Transactions will continue to take place in the future and that any Affiliated Transactions will be subject to the Procedures adopted by the Board of Directors. 2BCertain officers and directors of the Fund are also officers and directors of the Investment Advisers and/or their affiliates. The six independent directors of the Fund's Board are paid based upon an agreed fee of $1,000 per meeting. Three of the independent directors of the Fund also serve on the Fund's audit committee and are paid based upon an agreed fee of $1,000 per committee meeting. In addition to the meetings at $1,000 which amounted to $27,000, the directors also met twice for an extraordinary director committee meeting at an agreed fee of $125 per director. For the year ended September 30, 2018, the compensation expense for the six independent directors of the Fund was $28,500. 21

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS The affiliates of the Fund may have lending, banking, brokerage, underwriting, or other business relationships with the issuers of the securities in which the Fund invests. The total amount (in thousands) of other affiliated and unaffiliated transactions, listed by counterparty, during the year were as follows: Sales of Portfolio Securities % Securities Sold under Agreements to Repurchase % Purchases % UBS Puerto Rico $ - -% $ - -% $ 155,500 14% Unaffiliated - -% - -% 966,178 86% Total $ - -% $ - -% $ 1,121,678 100% Note 4 - Unit Transactions: Currently, the Fund's units are experiencing a period of limited liquidity and/or trading at a discount to its net asset value. Although the holders of the units do not have the right to redeem their units inasmuch as the Fund is closedended, the Fund may offer a repurchase of units in the open market, in an attempt to increase the liquidity of the units as well as reduce any market discount from its corresponding net asset value. There is no assurance that, if such action is undertaken, it will result in the improvement of the units' liquidity or reducing any such market discount. The Fund s policies require that repurchase of units from an affiliated party be effected in accordance with procedures to address any conflicts of interest which may arise. On January 31, 2014, the Board of Directors authorized the repurchase by the Fund of outstanding units of Common Stock (the "Units") in open-market transactions to be repurchased of up to 25% of the Fund's total assets as of January 31, 2014, at unit prices equal to or at a discount of the corresponding net asset value ("NAV") per unit. As of September 30, 2018, 2.87% or $6,162,970 of total assets are still available to be repurchased. For the year ended September 30, 2018, there was no common stock repurchased by the Fund. Unit transactions for the years ended September 30, 2018 and 2017, were as follows: Dollar Amount 2018 2017 Common Units: Reinvestment of dividends on common units $ 17,018 $ 21,943 Increase in net assets derived from common unit transactions $ 17,018 $ 21,943 Units Amount 2018 2017 Common Units: Beginning balance 14,811,716 14,805,470 Units issued due to reinvestment of dividends at net asset value 5,370 6,246 Ending balance 14,817,086 14,811,716 22

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS Note 5 - Investment Transactions: The cost of securities purchased and proceeds from sales, maturities, calls and paydowns of portfolio securities (in thousands), excluding short-term transactions, for the year ended September 30, 2018 were as follows: Purchase Sales Maturities/Calls Paydowns Puerto Rico GNMA Taxable $ - $ - $ - $ 268 Puerto Rico GNMA Exempt - - - 575 Puerto Rico Freddie Mac Taxable - - - 120 Puerto Rico Fannie Mae Taxable - - - 730 Puerto Rico Collateralized Mortgage Obligations Taxable - - - 28 Puerto Rico Tax Exempt Notes - - - 50 Puerto Rico Govt. Instrumentalities Tax Exempt Notes - - - - Total $ - $ - $ - $ 1,771 Note 6 - Securities Sold under Agreements to Repurchase: Weighted average interest rate at end of year 2.59% Maximum aggregate balance outstanding at any time during the year $42,937,800 Average balance outstanding during the year $42,286,362 Average interest rate during the year 1.95% At September 30, 2018, the interest rate on securities sold under agreements to repurchase ranged from 2.23% to 3.04% with maturities up to November 2, 2018. Some of the outstanding agreements to repurchase as of year end may be called by the counterparty before their maturity date. At September 30, 2018, investment securities with fair values amounting to $44,296,849 are pledged as collateral for securities sold under agreements to repurchase. The counterparties have the right to sell or repledge the assets during the term of the repurchase agreement with the Fund. Interest payable on securities sold under agreements to repurchase amounted to $24,596 at September 30, 2018. At September 30, 2018, the total value (in thousands) of securities sold to affiliates and non-affiliates under agreements to repurchase were as follows: Counterparty Amount % UBS Puerto Rico $10,854 26% Unaffiliated 30,322 74% Total $41,176 100% Note 7 Short-Term and Long-Term Financial Instruments: The fair market value of short-term financial instruments, which include $41,176,064 of securities sold under agreements to repurchase, are substantially the same as the carrying amount reflected in the Statement of Assets and Liabilities, as these are reasonable estimates of fair value, given the relatively short period of time between origination of the instrument and their expected realization. There are no long-term financial debt instruments outstanding at September 30, 2018. 23

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS Note 8 Credit Facility: The Fund has available with Banco Popular (an affiliate of the Investment Advisers) an uncommitted line of credit that is part of a credit facility extended to the Puerto Rico Investors Family of Funds and the Popular Family of Funds. The proceeds of the credit advances will be exclusively used by the Fund for short term funding needs arising from failed repurchase agreement transactions or cash shortfalls due to the non-receipt by the Fund of payments in the settlement process of transactions to which the Fund is a party. The Fund can obtain credit advances not to exceed the lesser of $35,000,000 or ten percent (10%) of Banco Popular s capital stock and surplus, provided that the aggregate sum of all outstanding balances under all credit facilities never exceeds $200,000,000. Interest on the unpaid balance of each credit advance accrues at a rate of 2.25% over the one week Libor Rate and will be payable on the dates set forth in each credit facility note. The Fund had no outstanding balance as of September 30, 2018 and had the complete credit facility available for drawing, subject to the limitations described above. Note 9 Concentration of Credit Risk: Concentrations of credit risk (whether on or off-balance sheet) that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. For this purpose, Management has determined to disclose any investment whose fair value is over 5% of Net Assets, both individually or in the aggregate. Moreover, collateralized investments have been excluded for this disclosure. The major concentration of credit risk arises from the Fund's investment securities in relation to the location of issuers. For calculation of concentration, all fixed-income securities guaranteed by the U.S. Government are excluded. At September 30, 2018, the Fund had investments with market value of $20,213,653, which were issued by entities located in the Commonwealth of Puerto Rico and are not guaranteed by the U.S. Government nor the Puerto Rico Government. Also, at September 30, 2018, the Fund had investments with market values of $9,173,145, $39,797,209 and $7,646,815 which were each issued by one issuer located in the United States of America and not guaranteed by the U.S. Government. As stated in the Prospectus, the Fund will ordinarily invest at least 67% of its total assets in Puerto Rico obligations ( the 67% Investment Requirement ). Therefore, to the extent the securities are not guaranteed by the U.S. Government or any of its subdivisions, the Fund is more susceptible to factors adversely affecting issuers of Puerto Rico obligations than an investment company that is not concentrated in Puerto Rico obligations to such degree. Note 10 - Investment and Other Requirements and Limitations: The Fund is subject to certain requirements and limitations related to investments and leverage. Some of these requirements and limitations are imposed statutorily or by regulation while others are by procedures established by the Board of Directors. The most significant requirements and limitations are discussed below. The Fund's investment objective is to provide investors in its Common Units with current income, consistent with the preservation of capital. To achieve its investment objective and comply with the Office of the Commissioner of Financial Institutions ( OCFI ) regulations, the Fund must invest at least 67% of its total assets in securities issued by the Commonwealth of Puerto Rico, its political subdivisions, agencies and instrumentalities and in Puerto Rico mortgage-backed securities, equity, debt securities, and repurchase agreements issued by corporations or partnerships organized under the laws of the Commonwealth of Puerto Rico, or issued by U.S. or foreign corporations and partnerships doing business in Puerto Rico provided they comply with certain requirements. Up to 33% of its total assets may be invested in securities issued by the United States government, its political subdivisions, agencies and instrumentalities and municipal securities issued in the United States. 24

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS From time to time, the Fund is permitted not to comply with the 67% Investment Requirement. According to the Commissioner s ruling, non-compliance may be allowed for a limited period of time due to market scarcity of allowable securities and certain other limited circumstances. The Fund's leverage, measured in relation to total assets, may not exceed 50%. Should this ratio be exceeded, the Fund is precluded from further leverage transactions until the maximum 50% ratio is restored. The Fund may issue preferred stock, debt securities and other forms of leverage to the extent that immediately after their issuance the value of the Fund s total assets less all the Fund s liabilities and indebtedness which are not represented by preferred stock, debt securities, or other forms of leverage being issued or already outstanding is equal to or greater than 200% of the aggregate par value of all outstanding preferred stock (not including any accumulated dividends or other distributions attributable to such preferred stock) and the total amount outstanding of debt securities and other forms of leverage. At September 30, 2018, the Fund was not in compliance with the 67% Investment Requirement. The Fund sought and obtained temporary waivers from the Puerto Rico Office of the Commissioner of Financial Institutions with respect to its Puerto Rico asset investments and leverage limitations until June 30, 2019. These waivers provide temporary relief to the Fund from having to limit or otherwise change the strategy of its investment or leverage transactions. Management intends to continue to seek these waivers in the future, to the extent necessary. If further relief is not granted, the Fund would have to use proceeds derived from the sale, exchange, prepayment, maturity, or any voluntary or involuntary disposition of an asset to re-achieve compliance with the 67% investment requirement in Puerto Rico assets, and would not be able to renew leverage beyond its leverage limitations. Based on the representations and opinion of the Investment Advisers and consistent with the Fund s investment objective, the OCFI has granted to the Fund, in a letter dated September 18, 2015, no-objection relief with respect to the Fund s investment-grade credit rating requirement for Puerto Rico municipal securities. This permits the Fund to continue to invest in Puerto Rico municipal securities that do not have an investment-grade credit rating notwithstanding that the current credit rating of such securities is below investment-grade, under certain conditions and at the discretion of the Investment Adviser. Such no-objection relief is effective through June 30, 2019 or such other later date which may be approved by the OCFI. Note 11 - Reconciliation between Net Investment Income and Distributable Net Investment Income for Tax Purposes and Net Realized Loss on Investments and Net Realized Loss on Investments for Tax Purposes: As a result of certain reclassifications made for financial statement presentation, the Fund s net investment income and net realized gain or loss on investments reflected in the financial statements differ from distributable net investment income and net realized loss on investments for tax purposes, respectively, as follows: Net investment income $ 1,801,533 Reclassification of realized loss on securities paydowns 415 Distributable net investment income, for tax purposes $ 1,801,948 Net realized gain(loss) on investments $ - Reclassification of realized loss on securities paydowns (415) Net realized loss on investments, for tax purposes $ (415) 25

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS The undistributed net investment income and accumulated net realized loss on investments and derivatives, (for tax purposes), at September 30, 2018 were as follows: Undistributed net investment income, beginning of the year $ 4,276,735 Distributable net investment income for the year 1,801,948 Dividends (2,728,389) Undistributed net investment income, end of the year $ 3,350,294 Accumulated net realized loss on investments and derivatives, beginning of the year $(131,805,609) Net realized loss on investments for the year (415) Accumulated net realized loss on investments and derivatives, end of the year $(131,806,024) Note 12 - Indemnification: In the normal course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund s maximum exposure under these agreements is unknown. However, the Fund has not paid prior claims or losses pursuant to these contracts and expects the risk of losses to be remote. Note 13 Risks and Uncertainties: The Fund is exposed to various types of risks, such as geographic concentration, industry concentration, nondiversification, interest rate, and credit risks, among others. This list is qualified in its entirety by reference to the more detailed information provided in the prospectus for the securities issued by the Fund. The Fund s assets are invested primarily in securities of Puerto Rico issuers. As a result, the Fund has greater exposure to adverse economic, political or regulatory changes in Puerto Rico than a more geographically diversified fund, particularly with regards to municipal bonds issued by the Commonwealth and its related instrumentalities, which are currently experiencing significant price volatility and low liquidity. Also, the Fund s net asset value and its yield may increase or decrease more than that of a more diversified investment company as a result of changes in the market s assessment of the financial condition and prospects of such Puerto Rico issuers. Interest rate risk is the risk that interest rates will rise so that the value of existing fixed rate securities will fall. The current low long-term rates present the risk that interest rates may rise and that as a result the Fund s investments will decline in value. Also, the Fund s yield will tend to lag behind changes in prevailing short-term interest rates. In addition, during periods of rising interest rates, the average life of certain types of securities may be extended because of the right of the issuer to defer payments or make slower than expected principal payments. This may lock-in a below market interest rate, increase the security s duration (the estimated period until the security is paid in full), and reduce the value of the security. This is known as extension risk, which the Fund is also subject to. Conversely, during periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled in order to refinance at lower interest rates, forcing the Fund to reinvest in lower yielding securities. This is known as prepayment risk, which the Fund is also subject to. Credit risk is the risk that debt securities in the Fund s portfolio will decline in price or fail to make dividend or interest payments when due because the issuer of the security experiences a decline in its financial condition. The risk is greater in the case of securities rated below investment grade, or rated in the lowest investment grade category. The Fund may engage in repurchase agreements, which are transactions in which the Fund sells a security to a counterparty and agrees to buy it back at a specified time and price in a specified currency. Repurchase 26

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS agreements involve the risk that the buyer of the securities sold by the Fund might be unable to deliver the securities when the Fund seeks to repurchase them and may be unable to replace the securities or only at a higher cost. Mortgage-backed securities in which the Fund may invest have many of the risks of traditional debt securities but, in general, differ from investments in traditional debt securities in that, among other things, principal may be prepaid at any time due to prepayments by the obligors on the underlying obligations. As a result, the Fund may receive principal repayments on these securities earlier or later than anticipated by the Fund. In the event of prepayments that are received earlier than anticipated, the Fund may be required to reinvest such prepayments at rates that are lower than the anticipated yield of the prepaid obligation. The rate of prepayments is influenced by a variety of economic, geographic, demographic, and other factors, including, among others, prevailing mortgage interest rates, local and regional economic conditions, and home owner mobility. Since a substantial portion of the assets of the Fund may be invested in mortgage-backed securities at any time, the Fund may be subject to these risks and other risks related to such securities to a significant degree, which might cause the market value of the Fund s investments to fluctuate more than otherwise would be the case. Collateralized mortgage obligations or CMOs exhibit similar risks to those of mortgage-backed securities but also present certain special risks. CMO classes may be specially structured in a manner that provides a variety of investment characteristics, such as yield, effective maturity, and interest rate sensitivity. As market conditions change, however, particularly during periods of rapid or unanticipated changes in interest rates, the ability of a CMO class to provide the anticipated investment characteristics and performance may be significantly reduced. These changes may result in volatility in the market value, and in some instances, reduced liquidity of the CMO class. The Fund may also invest in illiquid securities which are securities that cannot be sold within a reasonable period of time, not to exceed seven days, in the ordinary course of business at approximately the amount at which the Fund has valued the securities. There presently are a limited number of participants in the market for certain Puerto Rico securities or other securities or assets that the Fund may own. That and other factors may cause certain securities to have periods of illiquidity. Illiquid securities may trade at a discount from comparable, more liquid investments. There may be few or no dealers making a market in certain securities owned by the Fund, particularly with respect to securities of Puerto Rico issuers including, but not limited to, investment companies. Dealers making a market in those securities may not be willing to provide quotations on a regular basis to the Investment Adviser. It may, therefore, be particularly difficult to value those securities. In order to attempt to hedge various portfolio positions or to enhance its return, the Fund may invest a portion of its total assets in certain instruments which are or may be considered derivatives. Because of their increased volatility and potential leveraging effect (without being subject to the Fund s leverage limitations), derivative instruments may adversely affect the Fund. For example, investments in indexed securities, including, among other things, securities linked to an equities or commodities index and inverse floating rate securities, may subject the Fund to the risks associated with changes in the particular indices, which may include reduced or eliminated interest payments and losses of invested principal. Such investments, in effect, may also be leveraged, thereby magnifying the risk of loss. Fitch Ratings ("Fitch"), Moody s Investors Service ("Moody's"), and S&P Global Ratings ("S&P") have downgraded the general obligation bonds ( GOs ) of the Commonwealth of Puerto Rico, as well as the obligations of certain Commonwealth agencies and public corporations, including sales tax debt issued by the Puerto Rico Sales Tax Financing Corporation ( COFINA ) and the Employees Retirement System of the Government of the Commonwealth of Puerto Rico ("ERS"), on numerous occasions. Most recently, Fitch downgraded the GOs to D (default) and its ratings for the Commonwealth as a bond issuer, to RD on July 6, 2016, and for COFINA and ERS, both to D on July 3, 2017 and July 20, 2017, respectively. S&P had previously downgraded ERS, to "C" on September 10, 2015, and subsequently the GOs, to D (default) on July 7, 2016, and the debt ratings for the Government Development Bank for Puerto Rico, to D (default) on September 8, 2016, and for COFINA, to D 27

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS (default) on June 6, 2017. Finally, Moody s downgraded ERS, to "C" on April 5, 2017, and the GOs and COFINA s senior bonds, to Ca on October 11, 2017. All non-default ratings carry a negative outlook. On June 30, 2016, the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA") was signed into law. It created the Financial Oversight and Management Board for Puerto Rico (the "Oversight Board") with broad powers designed to help the Commonwealth balance its finances, restructure its debt, and ensure a return to the markets. The enactment of PROMESA operated as a stay of any actions or proceedings against the Commonwealth and its agencies and instrumentalities by its creditors, which stay was in effect through May 1, 2017. As of that date, the Oversight Board has filed five (5) petitions to commence cases under Title III of PROMESA in the U.S. District Court for the District of Puerto Rico (the "District Court") with respect to all debt issued by: the Commonwealth of Puerto Rico; COFINA; ERS; the Puerto Rico Highways and Transportation Authority; and the Puerto Rico Electric Power Authority ( PREPA ). The filing of these petitions triggered a new stay of any actions or proceedings against these five debtors. In the COFINA Title III case, the District Court granted a motion by Bank of New York Mellon ("BNYM"), the COFINA bond trustee, ruling that all funds for payment of interest and principal on COFINA bonds were to be held by BNYM pending the resolution of the various conflicting claims of holders and insurers of COFINA bonds. Additionally, the Commonwealth has asserted claims against the collateral securing the COFINA bonds, and there is litigation pending between the Commonwealth and COFINA regarding ownership of this collateral. As a result, all interest and principal payments on the COFINA bonds are currently suspended, pending resolution of the various conflicting claims through either a decision from the District Court or a mediated settlement. The Commonwealth, COFINA, certain COFINA bondholders, and others participated in a mediation process, led by a team of five judges appointed by the District Court. On June 7, 2018, the Commonwealth and the COFINA agents filed a joint motion disclosing the terms of their restructuring agreement in principle and through which the sales and use tax would be apportioned between the Commonwealth and COFINA. Thereafter, on August 29, 2018, COFINA, the Puerto Rico Fiscal Agency and Financial Advisory Authority (known by its Spanish initials "AAFAF"), the Oversight Board, and certain COFINA credit parties entered into a Plan Support Agreement to implement such agreement in principle. The Oversight Board then filed COFINA's Title III Plan of Adjustment and corresponding Disclosure Statement with the District Court on October 19, 2018. On November 8, 2018, the Puerto Rico legislature approved a bill to allow for the implementation of the COFINA restructuring agreement, effective upon the consummation of the COFINA Plan of Adjustment. The District Court approved such Disclosure Statement on November 20, 2018. The District Court has scheduled a hearing on January 16, 2019, to approve COFINA's Title III Plan of Adjustment and settlement of the before-mentioned claims. With respect to the ERS bonds, certain ERS bondholders reached a consensual agreement with the Commonwealth, ERS, and the Oversight Board which, among other things, provided that (i) all employer contributions received by ERS during the pendency of the PROMESA stay would be segregated in an account for the benefit of holders of the ERS bonds, and (ii) ERS would transfer to BNYM, as ERS' fiscal agent, the amounts required each month for the payment of interest on the ERS bonds. On June 5, 2017, AAFAF, on behalf of ERS, delivered a non-funding notice as permitted under the agreement, stating that ERS would discontinue transferring the amounts necessary to pay interest due on the ERS bonds commencing on July 1, 2017 and going forward. Certain ERS bondholders, including the Fund, filed a motion to lift the stay with the District Court on May 31, 2017, to seek adequate protection of the ERS bondholders' collateral. The Puerto Rico Legislature then adopted a joint resolution on June 25, 2017, which, among other things, purported to terminate the obligations of all Puerto Rico central government instrumentalities, as well as all public corporations and municipalities, to transmit any employer contributions to ERS. On June 28, 2017, the District Court ordered the ERS creditors, the Oversight Board, and the Commonwealth to attempt to reach another consensual agreement, in line with what was previously agreed. On July 17, 2017, the District Court issued an order approving the joint stipulation (the "Joint Stipulation") entered into among certain ERS bondholders, the Commonwealth, ERS, and the Oversight Board, which provides for the payment of interest on the ERS bonds through the date that the District Court enters a ruling in an action seeking 28

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS declaratory relief regarding the validity of ERS bondholders liens and security interests in certain collateral, as well as the deposit by the Commonwealth of approximately $18,500,000 in employer contributions from municipalities and public corporations into a segregated account of ERS for the benefit of ERS bondholders in July, August, September, and October 2017 (the "Declaratory Relief Action"). The Fund received the interest payments on the ERS bonds through and including November 1, 2017. However, with respect to the November 1st interest payment, AAFAF argued before the District Court that the funding by BNYM of such payment was in violation of the automatic stay applicable in ERS s Title III case and demanded that BNYM reverse the payment. On December 28, 2017, the District Court issued another order (the "December 2017 Order") stating that the Joint Stipulation required continued payment of monthly interest on the ERS bonds in the aggregate amount of $13,876,582, beyond October 31, 2017, until such date as the District Court issued a decision in the Declaratory Relief Action or the exhaustion of the amounts held in the segregated account for the payments, the latter of which occurred on July 20, 2018. The December 2017 Order also contemplated that the monthly interest payments required thereunder be applied to all series of the ERS bonds, including the capital appreciation bonds that would otherwise not be entitled to current interest, with such payments expressly constituting adequate protection payments for all ERS bondholders, in accordance with the December 2017 Order, PROMESA, and the U.S. Bankruptcy Code. The District Court reserved for future consideration the final allowance and treatment of such adequate protection payments in determining the allowed amount of the claims under the ERS bonds in the ERS Title III case. The District Court dismissed the Declaratory Relief Action on August 17, 2018, ruling against the ERS bondholders and determining, among other things, that they do not possess a perfected security interest over the ERS bondholders' collateral and that any security interest held by the ERS bondholders over their ERS collateral is invalidated and unenforceable. Certain ERS bondholders have appealed that final judgment to the U.S. Court of Appeals for the First Circuit. In addition to defending the ERS bondholders collateral in the Declaratory Relief Action, now under appeal, certain ERS bondholders also instituted a lawsuit on July 27, 2017, challenging the Puerto Rico Legislature s June 25, 2017 joint resolution purporting to terminate employer contributions to ERS; that litigation remains pending. Any future developments in this respect could result in additional interruptions in cash flow on debt payments, which may result in more price volatility, across Puerto Rico securities. There can be no assurance that any additional defaults by the Commonwealth and other Commonwealth instrumentalities will not have an additional adverse impact on the Fund s net investment income and its ability to declare and pay dividends in the future. The passage of Hurricane María over Puerto Rico on September 20, 2017 is considered the most destructive storm to hit Puerto Rico in almost 90 years. It knocked out all electric power, destroyed more than 100,000 homes, and ruptured bridges and other public infrastructure. Puerto Rico is facing substantial economic and revenue disruption in the near term, and diminished output and revenue has negatively impacted the Puerto Rico government's ability to repay its debt. While it remains too early to determine the long-term economic effects post-hurricane María, the long-term repercussions may be mixed. On one hand, an exodus of residents relocating to the U.S. mainland has eroded Puerto Rico's economic base. However, significant amounts of U.S. federal aid and private insurance proceeds are becoming available to aid in rebuilding, thereby spurring economic growth and infrastructure replacement. On February 9, 2018, President Donald J. Trump signed into law the Bipartisan Budget Act of 2018, which includes a disaster relief package of up to $16 billion for Puerto Rico and the U.S. Virgin Islands, to be used for the Medicaid program and projects under the Community Development Block Grant. Governor Rosselló has also announced plans to privatize PREPA and the generation of energy in Puerto Rico and award a concession of the distribution and transmission of energy. Thereafter, on February 13, 2018, the Commonwealth, PREPA, and the Puerto Rico Aqueducts and Sewers Authority submitted revised fiscal plans to the Oversight Board for its review and certification. Such fiscal plans will establish the fiscal roadmap for the Commonwealth through the fiscal year ending in 2023. The Oversight Board has requested revisions to such fiscal plans on various occasions. 29

PUERTO RICO INVESTORS BOND FUND I SEPTEMBER 30, 2018 NOTES TO FINANCIAL STATEMENTS On July 30, 2018, PREPA, AAFAF, the Oversight Board, and the Ad Hoc Group of PREPA Bondholders published a Preliminary Restructuring Support Agreement, proposing that PREPA Bondholders exchange their uninsured bonds for two (2) bond tranches secured by a staggered transition charge on electricity consumption. Thereafter, on November 29, 2018, the Puerto Rico government announced that it had concluded the restructuring of the debt of the Government Development Bank for Puerto Rico ("GDB"). The GDB restructuring under Title VI of PROMESA covers approximately $4 billion of debt; bondholders will receive $550 of new bonds for every $1,000 of their existing GDB bond claims, while Puerto Rico municipalities will realize about $55 million in near-term debt service savings. As of September 30, 2018, 25% of the Fund s assets were held in securities issued by Puerto Rico Employees Retirement System, Puerto Rico Sales Tax Financing Corporation, Puerto Rico Highways and Transportation Authority, Puerto Rico Commonwealth Aqueduct and Sewer Authority, and Puerto Rico Commonwealth Industrial Development Company. There can be no assurance that any additional defaults by the Commonwealth and other Commonwealth instrumentalities will not have an adverse impact on the Fund s net investment income and its ability to declare and pay dividends in the future. Any future developments in this respect could result in additional interruptions in cash flow on debt payments, which may result in more price volatility, across Puerto Rico securities. On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), which contains an amendment to the U.S. Investment Company Act of 1940, as amended (the "1940 Act"), to repeal the exemption from its coverage of investment companies created under the laws of Puerto Rico, the U.S. Virgin Islands, or any other U.S. possession. The bill amends the 1940 Act by eliminating the exemption provided to U.S. possessions under its Section 6(a)(1). The repeal of the exemption will take effect three (3) years after enactment of the bills. The amendment also provides the U.S. Securities and Exchange Commission ( SEC ) with the authority to extend the three-year safe harbor by up to an additional three (3) years. According to a report issued by the House Financial Services Committee in connection with a similar amendment previously considered by the U.S. House of Representatives, the elimination of the 1940 Act exemption of investment companies headquartered in a U.S. territory would subject them to existing U.S. federal requirements for investment companies, such as registering with the SEC, meeting minimum capital requirements, making disclosures to investors, and registering the securities they offer. Currently, Fund management is evaluating the impact that these additional requirements will have on the Fund and is contemplating seeking guidance from the SEC as to a possible time extension of the three-year safe harbor. The cost of the mandate will include registration fees and the ongoing costs of complying with SEC requirements. There is no assurance as to what the ultimate impact of this law may be on the Fund or what guidance the SEC may provide in such respect. Note 14 - Subsequent Events: On October 30, 2018, the Board of Directors declared an ordinary net investment income dividend of $0.009583 per common share, totaling $141,995 which was paid on November 13, 2018 to common shareholders of record as of October 31, 2018. On November 29, 2018, the Board of Directors declared an ordinary net investment income dividend of $0.009583 per common unit, totaling $141,995 which was paid on December 10, 2018 to common unitholders of record as of November 30, 2018. The Fund has performed an evaluation of events occurring subsequent to September 30, 2018 through December 14, 2018, which is the date the financial statements were available to be issued. Management has determined that there were no events occurring in this period that required disclosure in or adjustment to the accompanying financial statements other than those disclosed above. 30