The Puerto Rico Electric Power Authority said Monday it is seeking approval from the Oversight Board for its deal with its creditors that was reached outside the court supervised restructuring that's underway for other issuers in the territory.
If the board approves the deal, Title VI of the Puerto Rico Oversight, Management, and Economic Stability Act would require the deal to be put to a vote by the bondholders. The board last week put the central government and other Puerto Rico issuers into a bankruptcy-like process under Title III of the act.
According to Title VI, holders of at least two-thirds of each pool’s principal who vote would have to approve the modification of terms and holders of at least 50% of total principal outstanding in each pool would have to approve it. The results would be binding on all bondholders.
According to PROMESA, every Puerto Rico bond issuer has at least one pool of bonds and these bonds are to be divided into different pools if they have different priorities or securities features.