NEW YORK--(BUSINESS WIRE)--Today the Puerto Rico Electric Power Authority (PREPA) bondholder group responded to the Oversight Board voting to reject the Restructuring Support Agreement (RSA) with PREPA:
“We believe the members of the Oversight Board who voted to reject the PREPA RSA fundamentally misunderstand the deal and what it would achieve. The RSA is a good deal for both sides that puts PREPA on a path to revitalization, while providing the flexibility for unlimited privatizations if that is the public policy chosen, a process beyond our role as creditors.
The reality is that the only way to ensure lower rates over the long-term is by investing in PREPA to make it an efficient, modern utility – which is why the RSA provides approximately $2 billion in debt service savings that can be used by PREPA to improve the current generation, transmission and distribution systems – and which can include renewables. The notion that the deal will drive up rates is false. The cost of the securitization – roughly 3 cents a k/wh – would be less than the current debt service, less than the cost for ratepayers of not investing in PREPA and not addressing its debt, and represents a very low percentage of PREPA's total budget and the rate consumers pay.
We do not understand the Board’s decision to block this deal after more than three years of cooperative, good faith negotiation by all stakeholders, exhaustive third-party review and explicit statements from the Chair of the Congressional Committee that drafted PROMESA that the law wasn't intended to give the Board the power to take this action. At this stage we remain open to working with the Oversight Board but are considering all options.”