Puerto Rico government and federal lenders to the Puerto Rico Aqueduct and Sewer Authority have extended their forbearance periods for the authority.
PRASA announced the extensions, one to March 30 and another to June 30, in a post to the Electronic Municipal Market Access web site on Thursday.
PRASA owes $4 billion in bond debt and has been paying its water revenue bonds on time. However, in late November it told the Puerto Rico Oversight Board that it will not be able to make its bond payments over the next 10 years unless it can boost revenues or cut costs.
On Dec. 30 United States Department of Agriculture's Rural Utility Services in its Rural Development Program agreed to extend forbear to PRASA on payments on bonds. The extension is by 90 days to March 30.
On Dec. 14 the authority reached an agreement with the Puerto Rico Environmental Quality Board and Department of Health to extend their forbearance on its repayment of state revolving funds. The board and department agreed to extend forbearance by six months to June 30.
The state revolving funds program originates with the U.S. Environmental Protection Agency.
PRASA isn't paying the state revolving fund loans back now, said Javier Verardi, who is chief of infrastructure projects in the water quality area of the Environmental Quality Board.
PRASA is asking to be exempted from paying principal on the state revolving fund loans for the next five years, Verardi said. The EPA, EQB, and Health Department haven't yet disclosed their stances on this request.
PRASA is making projections that assume it will get state revolving funds in the next five years, Verardi said. However, the EPA has frozen its access to the loans and it is unclear if this will change.
