Puerto Rico in Distress

ABI Analysis

Puerto Rico's electric power authority, PREPA, struggling with $9 billion of debt, won agreement from creditors to extend a forbearance agreement by 35 days, according to statements by a key bondholder faction and PREPA, Reuters reported yesterday.

Investors in the debt of Puerto Rico’s power utility have offered a 30-day extension of a creditor agreement that expires today, Bloomberg News reported today. The Puerto Rico Electric Power Authority (PREPA) has $8.6 billion of securities. Under the bondholder offer, the electricity provider would give creditors a restructuring plan by June 1.

Puerto Rico’s public agencies should be able to seek bankruptcy, Jeb Bush, a probable presidential candidate, said yesterday during a visit to the U.S. territory, Bloomberg News reported yesterday. Commonwealth officials are promoting a bill that would enable some agencies to access chapter 9 under federal bankruptcy law.

Puerto Rico’s power utility disagrees with a proposal from bondholders to modernize the agency and fix its finances as a contract between the parties is set to expire at month-end, Bloomberg News reported on Friday.