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    Puerto Rico Eyes Cutting Utility Bond Offer by Half - Bloomberg

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    Ottman Cruz
    The Puerto Rico financial oversight board is considering reducing the amount of new bonds that the Puerto Rico Electric Power Authority (Prepa) can offer to repay its creditors from $5.68 billion to $2.5 billion. This is less than half of the original amount and far below the $9 billion that Prepa owes. The board determined that steeper declines in energy consumption and rising costs require a larger debt reduction for the utility to achieve fiscal sustainability. Bondholders are likely to reject an offering that low. The bankruptcy process is expected to become more contentious as a result.

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    Puerto Rico Eyes Cutting Utility Bond Offer by Half - Bloomberg

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    Ottman Cruz
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    The Puerto Rico financial oversight board is considering reducing the amount of new bonds that the Puerto Rico Electric Power Authority (Prepa) can offer to repay its creditors from $5.68 billion to $2.5 billion. This is less than half of the original amount and far below the $9 billion that Prepa owes. The board determined that steeper declines in energy consumption and rising costs require a larger debt reduction for the utility to achieve fiscal sustainability. Bondholders are likely to reject an offering that low. The bankruptcy process is expected to become more contentious as a result.

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    The Puerto Rico financial oversight board is considering reducing the amount of new bonds that the Puerto Rico Electric Power Authority (Prepa) can offer to repay its creditors from $5.68 billion to $2.5 billion. This is less than half of the original amount and far below the $9 billion that Prepa owes. The board determined that steeper declines in energy consumption and rising costs require a larger debt reduction for the utility to achieve fiscal sustainability. Bondholders are likely to reject an offering that low. The bankruptcy process is expected to become more contentious as a result.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    28 views3 pages

    Puerto Rico Eyes Cutting Utility Bond Offer by Half - Bloomberg

    Uploaded by

    Ottman Cruz
    The Puerto Rico financial oversight board is considering reducing the amount of new bonds that the Puerto Rico Electric Power Authority (Prepa) can offer to repay its creditors from $5.68 billion to $2.5 billion. This is less than half of the original amount and far below the $9 billion that Prepa owes. The board determined that steeper declines in energy consumption and rising costs require a larger debt reduction for the utility to achieve fiscal sustainability. Bondholders are likely to reject an offering that low. The bankruptcy process is expected to become more contentious as a result.

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    © All Rights Reserved
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    27/6/23, 10:41 Puerto Rico Eyes Cutting Utility Bond Offer by Half - Bloomberg

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    Puerto Rico Eyes Cutting Utility Bond


    Offer by Half
    Board considers reducing amount of new debt to $2.5 billion
    Power utility is seeking to restructure $9 billion of bonds

    By Michelle Kaske LIVE ON BLOOMBERG

    Watch Live TV
    June 24, 2023, 4:24 AM UTC
    Listen to Live Radio

    Listen to this article


    Puerto Rico’s financial oversight board is considering
    2:23 slashing — by about half — the amount of new bonds it
    claims the island’s bankrupt power utility can repay, a
    Share this article potential offering that bondholders will most likely reject.

    The federally appointed board calculates that Puerto


    Rico’s Electric Power Authority, called Prepa, can only
    Gift this article repay $2.5 billion to its creditors, less than half the $5.68
    billion offered in its March debt-restructuring plan. It’s far
    Follow the authors
    below the $10 billion it owes, including nearly $9 billion
    @MichelleKaske
    to bondholders and fuel-line lenders.
    + Get alerts for
    Michelle Kaske
    Steeper-than-anticipated declines in energy consumption
    and rising costs require a larger-than-previously proposed
    cut to the amount of debt the utility is able to repay over
    time, the board, which is managing Prepa’s bankruptcy,
    said in a statement late Friday after it approved the
    utility’s multi-year fiscal plan.

    “The guiding principle for all debt restructurings is


    sustainability,” David Skeel, the board’s chairman, said in
    the statement. “The goal is to stabilize Prepa. The
    oversight board has been analyzing carefully and
    dispassionately how much debt Prepa can pay and made
    that determination strictly based on the most recent
    available data.”

    https://archive.ph/IBiRi 1/3
    27/6/23, 10:41 Puerto Rico Eyes Cutting Utility Bond Offer by Half - Bloomberg

    Puerto Rico Board Will Amend Power Utility’s Debt-


    Cutting Plan

    Reducing the repayment amount will probably make the


    bankruptcy process even more contentious and
    potentially lengthen the workout. An ad hoc group of
    bondholders has argued in court against the board’s
    recent $5.68 billion offer — claiming Prepa can pay more
    — and formal mediation talks between the parties are at a
    standstill. 

    The judge overseeing the nearly six-year bankruptcy


    scrapped on Wednesday a planned July confirmation
    hearing on a debt plan after the board said it needed
    more time to amend the proposal. 

    Puerto Rico Utility’s Hearing on Debt-Cutting Plan


    Postponed

    More residents are upgrading to energy efficient


    appliances and some are looking to reduce their reliance
    on the island’s weak and neglected grid by installing solar
    panels, according to the board’s statement. Those
    changes dampen energy consumption.

    Restructuring Prepa’s obligations is difficult. Bondholders


    Have a confidential haven’t been paid in years, but residents are already
    tip for our
    reporters? saddled with some of the costliest and least reliable
    Get in touch
    electricity in the US.

    Before it's here, “Prepa is not done,” Robert Mujica, the board’s executive
    it's on the
    director, said in the statement. “Electricity is not yet
    Bloomberg
    Terminal reliable. But the building blocks are in place. The
    implementation of the fiscal plan so far created an energy
    Learn more
    system that can and will improve over time.”

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    ©2023 Bloomberg L.P. All Rights Reserved

    https://archive.ph/IBiRi 2/3
    27/6/23, 10:41 Puerto Rico Eyes Cutting Utility Bond Offer by Half - Bloomberg

    https://archive.ph/IBiRi 3/3

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