NEW YORK--(BUSINESS WIRE)--The Puerto Rico Electric Power Authority (PREPA) Bondholder Group today announced that they have agreed to extend their forbearance agreement until September 15, 2015 and amend their trust agreement to allow PREPA to avoid a payment default on July 1, 2015. During the forbearance period the bondholders will continue to collaborate with PREPA towards a comprehensive plan that will sustainably improve PREPA.
“We remain focused on working with PREPA and its professionals to refine a long-term plan that is in the best interest of all stakeholders. Over the past several months of direct negotiations with PREPA and the GDB, we have made progress towards a workable solution for PREPA, and are hopeful that we have established a foundation for reaching an equitable deal for all PREPA stakeholders, which will help the island in its revitalization,” said Stephen Spencer of Houlihan Lokey, the PREPA Bondholder Group’s financial advisor.
If a restructuring support agreement is not reached by September 1, 2015, the forbearance agreement will automatically terminate.
Spencer continued, “While we believe there is the opportunity to reach an agreement by September 1st, it is essential that both sides be willing to compromise, treat each other fairly and negotiate in good faith. As a result, the agreement may be discontinued and appropriate legal action taken if there are unforeseen deteriorations in either the negotiations with PREPA or a broader decision made by Puerto Rico as a whole to treat bondholders unnecessarily unfairly during this process.”