Citi sells $146 mln loan in Puerto Rico's power authority - sources
By Nick Brown and Edward Krudy
NEW YORK May 7 (Reuters) - Citibank has sold a $146 million loan it had with the Puerto Rico Electric Power Authority (PREPA) to a distressed debt investment firm, two sources said on Thursday, in a sign of the growing uncertainty over the utility's finances.
PREPA's bank lenders and other bondholders are disputing who has priority in loan repayments, said one of the sources, who are familiar with the utility's ongoing, private debt restructuring talks and requested anonymity.
Citi sold its loan to Solus Alternative Asset Management, the sources said. Solus replaced Citi in an April 30 forbearance agreement with PREPA's lenders posted on the website of Puerto Rico's Government Development Bank (GDB). (here)
A Citi spokesman declined to comment on Thursday. PREPA and Solus did not return a request for comment.
PREPA is trying to restructure $9 billion in debt, held largely by bondholders who resist taking any write-down in their investments, and are pushing for other cost saving measures, like higher electricity rates.
Citi's $146 million loan was part of a larger credit line of around $700 million, which PREPA uses to buy oil. Another $525 million is held by a consortium led by Scotiabank. One member of that consortium, Oriental Bank, put its $200 million portion on a non-accrual status in April and took a $24 million provision.
The utility is scheduled to make a payment of around $400 million on July 1.
The agreements, which prevent creditors from calling a default, are also posted on the GDB website. Continuación...