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Progress For Puerto Rico Utility


April 15, 2015
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The Puerto Rico Electric Power Authority (“PREPA”) is at last making progress in attempting to resolve its finances.

Bloomberg Business is reporting that, in negotiations between PREPA and its creditors, the creditors are proposing an interim plan that would diversify PREPA’s fuel sources and thereby stabilize its energy costs. In reaction, PREPA will formulate its own proposal, according to its chief restructuring officer Lisa Donahue. Bloomberg reports that, as a result, PREPA’s bond prices are on the rise. According to Bloomberg, this trend is further reinforced by the fact that PREPA’s banks and investors are also negotiating to extend its loans and create a turnaround plan. As Donahue stated, “I’m optimistic that PREPA and the forbearing creditors will ultimately reach an agreement,” (although) “any such plan will need to provide for a capital structure that allows PREPA to pay all such debts and honor other obligations as they can do in accordance with the plan.”