NEW YORK--(BUSINESS WIRE)--The Ad Hoc Puerto Rico Electric Power Authority (PREPA) Bondholder Group today issued the following statement regarding the new partial PREPA restructuring proposal released by the Puerto Rico Fiscal Agency and Financial Advisory Authority (FAFAA):
“The proposal released today would not simply modify the existing restructuring support agreement (RSA) – rather, it would fundamentally change the terms of the deal for PREPA’s ad hoc bondholders. The modifications would undermine the value and structural integrity of the new PREPA securitization debt.
We have worked for almost three years to support PREPA and the RSA, and the deal has already enabled PREPA to pass along more than $2 billion of fuel cost savings to customers. Under the agreement, bondholders ultimately accepted a 15% principal haircut, a 5-year holiday on principal payments, and a 20% interest rate cut – which would reduce debt service in the first decade by over $1 billion.
Notably, this deal was supported by both the Puerto Rico legislature and the passage of PROMESA, which specifically promoted preexisting voluntary agreements like the PREPA deal, and so far it is the only template for future consensual restructuring agreements between Puerto Rico and its creditors. Furthermore, this deal provides the surest route back to the capital markets for Puerto Rico and should not be put at risk.
We remain open to constructive, reasonable discussions with the Governor and his Administration in order to execute a workable deal in the best interests of Puerto Rico and the people of the Commonwealth. To this end, we believe the RSA that has been in place for over 15 months remains the ideal path forward for achieving this goal.”