General Electric would commit to financing a new natural gas plant in Puerto Rico under a debt restructuring plan proposed by creditors of the island's struggling power utility, Reuters reported today. The plan, which also includes creation of more than 3,400 new jobs, comes during ongoing negotiations between the Puerto Rico Electric Power Authority (PREPA) and its creditors to restructure the utility's $9 billion in debt. An ad hoc group of PREPA creditors, including OppenheimerFunds and Franklin Templeton, on Saturday offered $2 billion to finance a turnaround at PREPA, $1.2 billion of which would fund a new natural gas facility. While it remains to be seen if PREPA will accept the proposal, new financing could stave off a messy default that would reverberate around the U.S. municipal bond market, and allow the utility to modernize its business, a key element in fixing Puerto Rico's ailing economy.
