The Puerto Rico Aqueduct and Sewer Authority is "optimistic" it can sell a bond by the end of August, raising money to repay a bank line and make capital improvements.
While the Commonwealth of Puerto Rico government has been experiencing increasing tight liquidity as it heads toward a restructuring of its debt, PRASA has generally been exceeding its budget forecasts for net revenue and debt service coverage.
Through the first nine months of the fiscal year on March 31 the authority was 4% ahead of budget for net revenues. It had $92 million in available funds rather than the budgeted $51 million.
The authority owes $90 million to Banco Popular on Aug. 31. It has been hoping to use some of a bond proceeds to pay off this bank line of credit. The rest of the proceeds are for capital spending. Published reports have said the PRASA bond would be around $700 million.
PRASA president Alberto Lázaro told the Bond Buyer, "We are working hard to do this and are optimistic that we will get it done." He didn't specify how large the bond would be.
If the bond is not sold, "We have alternate financing options but are concentrating on getting the bond sold," Lázaro said.
At a presentation by Puerto Rico's government on Monday, the government's debt restructuring advisor Jim Millstein, chief executive officer of Millstein & Co., said he believed PRASA could meet its existing debt commitments without modifications.
PRASA increased its water rates by 60% in mid-2013.
