Questions surround PREPA restructuring in Puerto Rico

Author: John Crabb | Published: 23 Aug 2018

The Puerto Rican electricity utility Puerto Rico Electric Power Authority (PREPA) announced details of a $3 billion restructuring deal to exchange existing bonds for new debt for existing debtors this month, marking a big stride in the company’s attempts to recover from significant indebtedness of more than $9 billion.

While the move has been welcomed as a step in the right direction, certain aspects have been brought into question including caveats that link the bonds to the island’s overall recovery and the quasi-private nature of the utility itself. 

"This is what many believe to be the most favourable outcome that could have come from this situation, it is a significant recovery," said Jaime Senior Fernández, partner at Headrick Rizik Alvarez & Fernández.

Puerto Rico is still struggling to recover from the devastation of 2017's hurricanes"Even if you value those bonds at less than face value, it still...