The deadline for the Puerto Rico Electric Power Authority to pay back its lines of credit to banks has been pushed back to Aug. 14.
On July 7 PREPA announced that banks had agreed to delay the pay back date to July 31.
PREPA owes to about $671 million to several banks in these lines of credit and is undergoing a financial crisis. On Thursday, July 31 the bank agreed to delay the deadline for pay back to Aug. 14, according to a Puerto Rico government spokeswoman.
Some have said that a PREPA default on the lines of credit would be a step toward a default on the authority's roughly $8.7 billion in bond debt.
"This latest show of support from our bondholders, bond insurers and lenders provides us with additional time to evaluate all available options to ensure we are reaching the best possible outcome for our employees, customers, creditors and suppliers," said Juan Alicea Flores, executive director for PREPA.
PREPA said it would continue to make payments to its suppliers and employees.
Also on Thursday, Standard & Poor's dropped its rating on PREPA's revenue bonds to CCC from B-minus. "We believe the absence of an overarching solution to liquidity issues and the structural imbalance among its revenues, operating expenses and debt service commitments suggests and increasing likelihood that the authority will not be able to satisfy debt service obligations on time and will restructure all or portions of its debt," said S&P analyst Judith Waite.
These revenue bonds are rated CC by Fitch Ratings and Caa2 by Moody's Investors Service.
All three ratings agencies have the bonds on watch for further downgrades.
