U.S. Rep. Urges Puerto Rico's Rossell- to Accept PREPA Deal

prepa-central-costa-sur-guayanilla-power-plant.jpg

The head of the United States House Subcommittee that oversees Puerto Rico sent a letter Tuesday to the island's governor urging him to accept the deal the Puerto Rico Electric Power Authority negotiated with bondholders.

"The risk of rolling black outs affecting the island's municipalities this summer is too great for your government to forestall action on making a final decision on the Restructuring Support Agreement," Doug LaMalfa, R-Calif., chairman of the subcommittee, wrote in a March 28 letter.

Gov. Ricardo Rossell-, who took office in January, has sought to alter terms of the deal that creditors and PREPA had worked on since the summer of 2014 and that was nearing consummation. A proposal made on March 21 that would reduce debt service reserves and lengthen maturities, among other unfavorable changes, had received a swift rebuke from bondholders.

On March 22 the House Natural Resources Committee's Subcommittee on Indian, Insular, and Alaska Native Affairs held a meeting on the governor's proposal to renegotiate the PREPA deal.

"We hope a final and affirmative agreement between the Puerto Rico Fiscal Agency and Financial Advisory Authority and the creditor group on the PREPA RSA is made swiftly prior to the March 31, 2017 deadline in order to prevent further crisis from escalating on the island," LaMalfa wrote. "Success in finalizing the PREPA RSA would set the crumbling utility on a sustainable path towards reliable, cost efficient power generation and a reentrance to the credit markets."

The letter is addressed to Rossell-. The representative sent a copy to the chairman of the Puerto Rico Oversight Board, José Carríon III.

For reprint and licensing requests for this article, click here.
Puerto Rico
MORE FROM BOND BUYER