Tuesday, January 31, 2023

Another Puerto Rico Entity Placed Under Emergency Period

By on May 1, 2016

SAN JUAN — As part of Gov. Alejandro García Padilla’s recent order declaring a moratorium on the Government Development Bank’s (GDB) debt service, an emergency period has been declared at the Puerto Rico Infrastructure Financing Authority (Prifa).

The public corporation, an affiliate entity of the GDB, faces a $5.1 million debt-service payment Jun. 15 — interest on the roughly $669 million in revenue bonds issued by Prifa back in 2011. Proceeds were loaned to the Ports Authority to “finance and refinance certain [of its] indebtedness,” including outstanding commercial loans and lines of credit with the GDB, according to bond documents.

afilogoThe executive order signed April 30 further states that only Prifa’s Ports-related bonds have been declared “covered obligations,” pursuant to the recently enacted Puerto Rico Emergency Moratorium & Financial Rehabilitation Act. But contrary to the troubled government bank, García Padilla hasn’t declared a moratorium on Prifa’s debt service.

In a televised message Sunday, García Padilla announced a moratorium on the GDB’s debt obligations, as the commonwealth stands ready to partially default on as much as $390 million due May 2 on the bank’s outstanding debt, which totals roughly $4 billion.

“Pursuant to Act 21, I ordered a moratorium on the debt service payment due by GDB [on May 2]. In light of Congress’s inaction, we were forced to enact Act 21 to protect the education, health and public safety and other essential services of our citizens from creditors,” the governor said.

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