Puerto Rico’s main electric utility won another week from bondholders to get insurance companies to sign onto an agreement to restructure the agency’s $8.2 billion of debt and for commonwealth lawmakers to approve the proposal, Bloomberg News reported yesterday. The agreement extends termination dates on an earlier accord between Puerto Rico Electric Power Authority and investors owning about 35 percent of the agency’s bonds to Dec. 17, the utility said. The pact, which was set to expire on Thursday, was extended for a third time since being signed last month. Island officials have yet to call for an extraordinary session of the legislature needed to consider a bill authorizing a restructuring of the utility known as PREPA. A PREPA restructuring would be the largest ever in the $3.7 trillion municipal-bond market. The U.S. Supreme Court on Friday said that it would hear an appeal by the commonwealth to reinstate a local debt-restructuring law that would allow some island agencies, including PREPA, to ask bondholders to take losses. Read more.
In related news, Puerto Rico Governor Alejandro Garcia Padilla today will visit Washington, D.C., to again ask Congress for help as the U.S. commonwealth seeks to recover from a nearly decade-long recession, Reuters reported yesterday. Garcia Padilla told a news conference in San Juan yesterday that he and other island leaders, including mayors and labor leaders, would travel to the U.S. capital to “convince Congress of the need we have for them to act.” Puerto Rico, confronted by $72 billion in debt and a 45 percent poverty rate, previously asked the U.S. government for legislative aid, mainly through extending it the bankruptcy protections enjoyed by U.S. states, and giving it the same Medicare funding as states. Read more.
Make sure to register for ABI’s Caribbean Insolvency Symposium on Feb. 4-6 in San Juan to join experts discussing Puerto Rico’s debt crisis!
For further analysis and developments on Puerto Rico’s debt crisis, be sure to visit ABI’s “Puerto Rico in Distress” webpage.
