Prepa Talks On Shaky Ground, Relending Terms Show
SAN JUAN – After agreeing on a $111 million relending bond, Puerto Rico Electric Power Authority bondholders are breaking it into two installments, of $55 million and $56 million, a signal that negotiations with bondholders are on shaky ground.
Sources told Caribbean Business that even though lawmakers took Prepa out of the debt moratorium, it was not enough to appease bondholders because the law has not been signed yet. La Fortaleza was forced to issue an executive order excluding the relending bonds from the debt moratorium but bondholders insist it be made part of the law.
Prepa announced Friday that it reached an agreement with its supporting creditors on the sale of the first installment of $111 million in “relending” bonds under the Restructuring Support Agreement (RSA) and related Bond Purchase Agreement (BPA).
As part of the agreement, Prepa should have received $55 million in bond proceeds on May 19 and will work separately on the second installment.
“This agreement with creditors demonstrates the continued commitment of Prepa to consummate the transactions laid out in the RSA,” Lisa Donahue, the public utility’s chief restructuring officer, said in a statement. “We are in the process of documenting the sale of the remaining $55 million in relending bonds.”
Completion of the RSA transaction and other aspects of Prepa’s transformation are subject to various contingencies and conditions.