A group of creditors that hammered out an $8.3 billion restructuring proposal covering Puerto Rico’s bankrupt power authority are receiving $151 million in special payments for their trouble, pushing their recoveries higher than the baseline of 77.5 cents on the dollar, WSJ Pro Bankruptcy reported. In exchange for negotiating the proposed deal, certain bondholders and bond insurers are collecting extra fees that will add about 1.62 percent to their aggregate recovery, according to papers filed last week in the Puerto Rico Electric Power Authority’s court-supervised bankruptcy. Those extra fees are on top of the baseline recovery that all creditors are receiving. They are being shared among bondholders, including Knighthead Capital Management LLC, BlueMountain Capital Management LLP and Marathon Asset Management LLP, and bond guarantor Assured Guaranty Corp. If more creditors sign on to the proposed settlement, they too could grab a portion of the $151 million pot, according to a spokesman for Puerto Rico’s financial oversight board, which has been steering the debt negotiations.
