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In Largest Ever Muni Restructuring, Puerto Rico Power Authority Strikes Deal With Creditors, Insurers
zerohedge.com / by Tyler Durden / 12/18/2015 10:36
When last we checked in on Puerto Rico’s seemingly intractable debt debacle, Governor Alejandro Garcia Padilla was pandering to Congress in an ill-fated attempt to secure some manner of federal intervention that would help to alleviate the strain on the island’s finances.
Meanwhile, the commonwealth avoided a messy default on $273 million in GO debt by using an absurd revenue clawback end-around to make a $354 million payment on December 1.
On Friday, we get the latest out of Puerto Rico and the news is … well, good we suppose.PREPA – Puerto Rico’s power authority – has reached a restructuring agreement with bondholders and insurers to refinance some $8.2 billion in debt via securitization.
As Bloomberg reports, “ad hoc creditors will take 15c haircut on bonds and bond insurers will put up $450m surety bond.”
As WSJ noted last week, “bondholders and lenders agreed three months ago to accept losses of 15% as part of an agreement to swap old Puerto Rico Electric Power Authority debt for new bonds with more protections [but] MBIA Inc. and Assured Guaranty [were] worried about the implications for other Puerto Rico debt and haven’t signed on.”
In short, “bond insurers can’t sell their risk and don’t want to set a precedent in which a utility, which could raise rates to pay debt, restructures instead.”
The post In Largest Ever Muni Restructuring, Puerto Rico Power Authority Strikes Deal With Creditors, Insurers appeared first on Silver For The People.
Source: http://silveristhenew.com/2015/12/18/in-largest-ever-muni-restructuring-puerto-rico-power-authority-strikes-deal-with-creditors-insurers-2/
