Puerto Rico's power company has rejected a new proposal from bondholders that calls for an $8.1 billion debt exchange amid growing concerns the public agency could be the first one in the U.S. territory to go bankrupt, The Associated Press reported yesterday. The Electric Power Authority said that the proposal would not lead to a successful restructuring and does not share the burden of its more than $9 billion debt. The negotiations between the power company and the bondholders group comes nearly two months after the agency submitted a long-awaited restructuring plan that calls for a minimum investment of $2.3 billion and a revision of rate structures, among other things. The full plan has not been publicly released. At the time, Houlihan Lokey, an adviser to bondholders, said that parts of the plan were positive but that others were unworkable and needed further negotiation. The group represents 40 percent of bondholders, which overall own $8 billion of the power company's debt. In its new counterproposal, the bondholders group states that privatizing generation could lower rates as it proposed delaying debt payments for $2.5 billion in savings it said could be invested elsewhere by the power company.
