Puerto Rico Electric Power AuthorityPrivate▼ Negative
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Proposed $3B settlement is less than $8.5B in claims, and source of funds may raise power bills, worsening financial position.
A federal control board overseeing Puerto Rico's finances has offered a $3 billion settlement to bondholders in a new push to restructure more than $10 billion in debt held by the U.S. territory's power company. The board is proposing paying cash and issuing new bonds to bondholders that have not settled and are seeking some $8.5 billion in claims. The proposed settlement represents $1.4 billion more than previously offered. Puerto Rico's Electric Power Authority has been trying to restructure its debt for roughly a decade, after the territory announced in 2015 it was unable to pay its more than $70 billion debt load, prompting Congress to create the federal board in 2016. The board said it has not yet identified the source to finance the proposed settlement, and some worry that funds could come from an increase in already high power bills.
Proposed $3B settlement is less than $8.5B in claims, and source of funds may raise power bills, worsening financial position.