The Puerto Rico Electric Power Authority (PREPA) Bondholder Group announced that prior to the expiration of the PREPA restructuring support agreement (RSA), PREPA refused its offer of approximately $170 million of additional liquidity.
This incremental financing, along with the $280 million that the RSA parties have already agreed to lend, would have fully funded PREPA’s July 1, 2017 coupon payment and allowed PREPA to honor its obligations and avoid lawsuits. In order to give PREPA time to evaluate this proposal, the bondholders also offered to extend the RSA to June 30, 2017. Following dismissal of these offers, the PREPA Bondholder Group recognizes that it is likely to file for Title III relief.
The release states, “While we expect negotiations with the Oversight Board and Puerto Rico to continue, the Group stands ready to defend and enforce its rights as necessary.”
Stephen Spencer, financial advisor to the PREPA Bondholder Group, states, “We are disappointed that PREPA has rejected our offer of additional liquidity, which reflected our group’s ongoing commitment to finding a collective solution to spur the revitalization of PREPA. We continue to believe the RSA represents the best path forward for PREPA, and remain open to working with PREPA and the Oversight Board to implement our deal.”
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