Puerto Rico Electric, bondholders reach restructuring support agreement

By Mark Reccek

Bethlehem, Pa., Jan. 28 – Puerto Rico Electric Power Authority (PREPA) and its bondholder group said an agreement has been reached whereby PREPA will reinstate an amended version of the restructuring support agreement, according to a Wednesday news release.

The release said, pursuant to the amended agreement, the parties expect the PREPA Revitalization Act to become law by Feb. 16. The original deadline set by the parties was Feb. 12.

Additionally, the creditors announced they have reached a new bond purchase agreement with PREPA. Pursuant to the agreement, $111 million of further funding will be provided by the bondholder group and PREPA through the purchase of new bonds. The release said half the notes will be issued once securitization legislation is passed, with the remaining half issued once the securitization structure is submitted to the energy commission.

“We are pleased to have reached this agreement with PREPA, which puts everyone back on track to consummate a deal that will benefit all stakeholders, especially the people of Puerto Rico,” Stephen Spencer, financial advisor to the PREPA bondholder group, said.

“We continue to support the PREPA Revitalization Act and the RSA deal as the path to providing PREPA a way back to stable, low-cost financing through access to the United States municipal bond market, and the lowest long-term utility rates possible for the Puerto Rican people.”

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