Prepa Bondholder Group blames utility for RSA termination

In the aftermath of the termination at midnight Friday of the restructuring support agreement (RSA) between the Puerto Rico Electric Power Authority (Prepa) and its creditors, the Prepa Bondholder Group issued a statement blaming Prepa for the break up in negotiations and announced they had offered the troubled utility to extend the RSA until February 12, to give more time to the Legislature to approve the controversial Prepa Revitalization Act.

"Unfortunately, PREPA is choosing not to extend the RSA," reads the statement. "While it is extremely disappointing and perplexing that PREPA has chosen to take this stance, we continue to remain open to reaching a deal with PREPA and it is our sincere hope that they reconsider their position and assume postures beneficial to the people of Puerto Rico.”

After being extended several time, the RSA was currently set to expire on January 22nd if the Revitalization Act was not passed by the Legislature by that date.

In the statement, the Bondholder Group expressed optimism on the bill's approval prospects. “Based on our direct and positive conversations with Puerto Rican lawmakers, we are optimistic that the bill will be passed and it was our desire to be as supportive of the legislative process as possible," the bond holders said.

In addition, the Prepa Bondholder Group had offered to extend a Bond Purchase Agreement (“BPA”) with PREPA, under which RSA creditors would provide $115 million in additional financing but subject to the Puerto Rico Energy Commission's approval by May 23 of the proposed securitization charge. "This amendment to the BPA reflects a milestone that was previously agreed upon, and was included in order to help ensure the deal would get done – as the energy commission approval is a vital element of the agreement."