SAN JUAN, Puerto Rico – Puerto Rico’s power company on Thursday rejected a new proposal from bondholders that calls for an $8.1 billion debt exchange amid growing concerns the public agency could be the first one in the U.S. territory to go bankrupt.
“It imposes disproportionate risks on ratepayers and other creditors,” the company said in a statement. “In addition to being unachievable, it is not supported by other creditor constituencies such as the bond insurers or the revolving fuel line lenders.”
The negotiations between the power company and the bondholders group comes nearly two months after the agency submitted a long-awaited restructuring plan that calls for a minimum investment of $2.3 billion and a revision of rate structures, among other things. The full plan has not been publicly released.
At the time, the Los Angeles-based investment bank Houlihan Lokey, an adviser to bondholders, said parts of the plan were positive but that others were unworkable and needed further negotiation. The group represents 40 per cent of bondholders, which overall own $8 billion of the power company’s debt.