PROMESA

Puerto Rico Gov. Jenniffer González Colón filed suit to end the island's contract with LUMA Energy for electrical transmission and distribution.

This is the first upgrade of bonds supported by assets currently or formerly in the Puerto Rico government's hands since the passage of PROMESA in 2016.

92% of the holders or insurers of Puerto Rico Electric Power Authority bonds reportedly now oppose the Oversight Board's proposed restructuring deal.

Bondholders say the insurers reneged on the bond insurance terms, which both firms deny in filings for the case, filed six years after the COFINA restucturing.

The three Puerto Rico Oversight Board members can resume their positions immidiately, District Court Judge Maria Antongiorgi-Jordan ruled.

"A lawsuit like this is probably critical for any future settlements or agreements, because it will (maybe) determine up front if the incoming [board] members, and thus whatever agreements they sign, are valid or not," said Matt Fabian, a partner at Municipal Market Analytics.

The Puerto Rico Energy Bureau has about 150 days to set new rates for consumers.

PREPA bondholders who back the Oversight Board's proposed deal say it will lose their support if not confirmed by Oct. 1.

Analysts unsure about the impact of the firings on bondholders.

The federal government didn't have enough influence in the resulting haircuts to the COFINA bondholders for it to be liable for their losses, the court said.

U.S. District Judge Laura Taylor Swain gave no indication at the hearing as to how she was leaning and said some issues might not be able to be resolved as a matter of law.

Two New York members of Congress called them "vulture funds" trying to get "blood out of a turnip" at the expense of Puerto Rico electricity customers.

Puerto Rico's disputes with New Fortress Energy, the parent of the island's power plant operator, Genera PR, could spread to PREPA.

As long as the Oversight Board offers virtually nothing to many PREPA bondholders, the bankruptcy is likely to be tied up for years in litigation.

Without the increase U.S. Virgin Islands matching funds bonds would have defaulted in the next few years, some observers said.

The budget is a good sign, analysts say, and may be a first step towards ultimately ending the Oversight Board's authority over the territory.

Whether PREPA can pay the administrative expense claim doesn't affect its validity, the bond parties said.

Observers say a bankruptcy by Genera PR could complicate the PREPA bankruptcy.

The Puerto Rico Oversight Board asked Judge Laura Taylor Swain to rule now and move quickly to disclosure and confirmation hearings.

The department shifted funds that would have been invested in solar power to improve the island's electrical system.