We have our own version of the Greece problem and the Fed are playing hardball.

July 1 (Reuters) - Municipal bond researchers at Franklin Templeton, whose funds are among the largest owners of Puerto Rico debt, on Wednesday predicted a "long and costly" legal battle as the Caribbean nation tries to restructure more than $70 billion in obligations.

"At the very least, in our assessment, Puerto Rico can expect creditors to seek legal affirmation and protection of contractual rights," said Rafael and Sheila Amoroso, co-directors of the municipal bond department at Franklin Templeton. Their report was published on the company's website.

"Unfortunately, we think it will likely be a long and costly battle regardless of the outcome," they said.