Puerto Rico in Distress
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ABI Analysis
Puerto Rico's power authority PREPA has reached a deal with its lenders to restructure $700 million in matured debt, a significant step in turning around the utility after it clinched a deal with bondholders earlier in September, Reuters reported yesterday. Finding a solution for PREPA has been seen as a critical test for the U.S.
Puerto Rico’s main electricity provider, PREPA, failed to extend a contract with its bond insurers that has given the power company time to negotiate a way to restructure its $8.3 billion of debt, Bloomberg News reported on Saturday.
The U.S. Treasury Department said yesterday that Congress should provide Puerto Rico with access to a restructuring regime to help the commonwealth deal with its fiscal challenges, Reuters reported yesterday. "Without federal legislation, a resolution across Puerto Rico's financial liabilities would likely be difficult, protracted and costly," the Treasury Department said in a statement.