Junk bonds

Two ratings agencies expect AES Puerto Rico to default on Puerto Rico municipal conduit bonds.

At issue is the completion of a WAPA financial settlement with its fuel supplier, Vitol, to which it owes about $278 million.

The authority hopes to have solar and wind provide 30% of the islands' electricity within two years.

The rating action affects $423 million in bonds and certificates of participation. The territory's issuer rating was affirmed at speculative-grade Ba1.

The bill's sponsor pointed to board members' need for expertise.

The authority's issues hamper the USVI economy, Gov. Bryan says in his state of the territory speech.

These would be the territory's first general obligation bond issuance since 2019.

The government has reached a settlement with the estate of Jeffrey Epstein.

The authority said it expects production problems and higher costs in the near future.

The financially distressed utility has less than two weeks to find a substitute supplier of 80% of its fuel.

S&P said the ProMedica's divestiture helps address operating losses but it's a longer road ahead to return to investment grade.

The goal is to reduce energy costs and exposure to energy price spikes.

Moody's says the cut is a credit negative for the U.S. Virgin Islands' matching fund bonds.

The pension system has sued WAPA demanding immediate payment of more than $2 million in employee contributions.

She expects $50 million more in revenues in fiscal 2023.

After next fiscal year, the governor expects both revenues and spending to increase.

While expenditures also grew, revenues came in 4.5% higher than projections and were higher than the authority's cost growth.

Analysts agree with Moody's that the island still faces financial risks.

The system is seeking about $7.7 million of past due contributions and loans.

Restructured muni debt has "typically outperformed the broader muni market, as issuers emerge from bankruptcy with higher debt-servicing capacity and the debt re-enters the municipal high-yield index," noted PIMCO.