Puerto Rico’s bankrupt power utility reached a tentative agreement with a “substantial number” of its bondholders, according to a federal oversight board, and received another week to finalize a potential deal to reduce nearly $9 billion of debt, Bloomberg News reported. U.S. District Court Judge Laura Taylor Swain on Thursday granted a request by the federally appointed board to postpone to Aug. 18 a deadline to file an amended debt-cutting plan. The board, which manages the bankruptcy, and some bondholders are working on the specific terms of a restructuring support agreement, according to the board’s motion seeking an extension. A potential debt deal between Puerto Rico’s Electric Power Authority, called Prepa, and its creditors would be a long-awaited and positive development in the utility’s six-year bankruptcy, which has been prolonged by hurricanes, the commonwealth’s own debt restructuring and the pandemic. “The oversight board is pleased to report it has reached an agreement in principle with a substantial number of holders of Prepa bonds to settle their respective claims against Prepa,” lawyers for the board wrote in Thursday’s court filing.
