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Government: FAFAA Adviser Rothschild to Lead Prepa Negotiations

By on January 27, 2017

SAN JUAN – The government announced Friday that the Fiscal Agency and Financial Advisory Authority (FAFAA) and its financial adviser, Rothschild, will lead negotiations with Puerto Rico Electric Power Authority (Prepa) bondholders.

Gov. Alejandro García Padilla affirmed Lisa Donahue (pictured) was contracted exclusively to manage Prepa's restructuring. / File

Prepa Chief Restructuring Officer Lisa Donahue

The statement, issued by FAFAA, did not say what role Lisa Donahue, Prepa’s chief restructuring officer, and her company, AlixPartners, will play in the negotiations. Her contract is set to expire on Feb. 15.

Gerardo Portela Franco, executive director of FAFAA, said in a statement that on behalf of Gov. Ricardo Rosselló the agency has determined it appropriate to extend the Jan. 31, 2017, milestone in the Restructuring Support Agreement (RSA) entered into by Prepa and certain of its creditor constituencies until March 31, 2017.

FAFAA, per its enabling act, is the only entity of the Government of Puerto Rico authorized to negotiate and reach agreements with creditors that restructure existing public debt, the statement reads.

“Therefore, FAFAA has formally requested that PREPA execute an extension of the RSA until March 31, 2017, and has informed it that FAFAA and its financial advisor, Rothschild, will now lead the negotiations with PREPA creditors,” he said.

“PREPA has been designated a ‘covered instrumentality’ by the Financial Oversight and Management Board for Puerto Rico. FAFAA will review the RSA, including its benefits and areas for improvement. FAFAA will also analyze whether the RSA leads Prepa towards compliance with the requirements set forth in the Puerto Rico Oversight, Management, and Economic Stability Act [Promesa] and whether it promotes a sustainable path for Puerto Rico’s energy infrastructure,” the statement reads.

Earlier Friday, however, Prepa’s Bondholder Group agreed to extend until Feb. 28 a deadline under the utility’s RSA that calls for amending the deal in order to comply with Promesa. The RSA expires in March but certain concessions related to Promesa were to expire next week.

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