With a deadline approaching Tuesday night, the Puerto Rico Electric Power Authority was close to an agreement with a group of bondholders for a restructuring of up to $5.7 billion of debt, according to two people with knowledge of the talks.
The terms under consideration included a bond exchange, which would mean a permanent loss for participating bondholders, along with measures to increase the likelihood that the bondholders would be repaid on the new debt, those people said.
By improving the utility’s creditworthiness, Prepa’s borrowing costs would also go down.
The total face value of Prepa’s outstanding debt is about $8.1 billion; of that, about $2.4 billion has been insured. The negotiations cover only the remaining $5.7 billion.
Prepa and its bondholders have been in restructuring talks for more than a year, and during that time its creditors agreed not to take any legal action to enforce their claims.
The agreement was scheduled to expire at midnight on Tuesday, but people with knowledge of the talks said they expected that a deal would be announced early Wednesday.
---nytimes.com
---nytimes.com
