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Puerto Rico Electric Power Authority support deal extended to Jan. 31
By Caroline Salls
Pittsburgh, Dec. 15 – The Puerto Rico Electric Power Authority (PREPA)’s bondholder group said the PREPA restructuring support agreement has been extended until Jan. 31.
In addition, PREPA creditors have agreed to forgo reimbursement of significant deal-related expenses, subject to an agreement being reached by Jan. 31 that will allow the near-term execution of the deal.
“Unfortunately, the delays in consummating the PREPA deal (including the non-consolidation of validation proceedings for the new bonds) have led to significant additional expense and risk for PREPA ratepayers and creditors alike,” the group said in a news release.
“This risk is furthered by the rising interest rate environment announced yesterday by the Federal Reserve Bank.”
However, the bondholders said they believe that the extension of the support agreement is a positive step that will ultimately lead to the implementation of the PREPA deal by mid-2017.
According to the release, PREPA’s creditors have supported it with more than $1 billion of incremental financial support “at a time when PREPA has no access to financial markets” and allowed the authority to pass nearly $2 billion in fuel cost savings along to its customers.
“We remain committed to the completion of this deal, which is still the sole consensual agreement reached between the commonwealth and a significant creditor group,” the bondholders said.
“We are confident that the execution of the RSA, which would represent the culmination of over two years of work by both sides, continues to represent the best path forward for the people of Puerto Rico, PREPA and its creditors.”
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