Puerto Rico’s bankrupt power authority moved closer to a creditor settlement that would ease its potential privatization, agreeing to restructuring terms with a bond guarantor and seeking to postpone further litigation, WSJ Pro Bankruptcy reported. Puerto Rico Electric Power Authority, the public electric utility known as PREPA, reached a restructuring deal with Assured Guaranty Corp., one of three bond insurers that had been agitating since last year for the installation of a receiver to wrest control of the utility. Assured joins a group of bondholders who have already agreed to restructuring terms with Prepa, which owes $9 billion in debt and has been operating since 2017 under bankruptcy protection. With the insurer’s support, Prepa has made peace with creditors for roughly half its debt, according to court papers filed on Tuesday in the U.S. District Court in San Juan. The judge presiding over Prepa’s bankruptcy would need to approve any restructuring deal for it to become effective. Insurers MBIA Inc. and Syncora Guarantee Inc. haven’t reached repayment terms, according to the court filing. The utility and Puerto Rico’s financial oversight board are requesting a postponement of further litigation over the receivership demand.
