Lenders to Puerto Rico’s electric power authority are giving the beleaguered utility another two weeks before it has to make past-due payments on its lines of credit, the New York Times DealBook blog reported yesterday. The Puerto Rico Electric Power Authority, which is known by its acronym Prepa, said it was engaged in “productive discussions” with its bondholders, bond insurers and the banks that provide the short-term bank lines. Prepa owes money on two main credit lines — a roughly $250 million line from Citigroup and a $550 million line from a syndicate of banks. If Citigroup and the other lenders force Prepa to pay immediately, it could trigger the authority’s restructuring and increase the likelihood of losses for the banks. The agreement allows Prepa to delay until Aug. 14 certain payments that were due last month, the authority said, but it’s unclear over the long term how the utility will be able to come up with the money that it owes.
