Puerto Rico bond insurer skips extending agreement to show urgency
By Jessica DiNapoli
NEW YORK, Sept 21 (Reuters) - Assured Guaranty, which insures bonds of Puerto Rico power authority PREPA, said on Monday it did not extend an agreement that protects the authority from lawsuits, underscoring the urgency of PREPA's ongoing restructuring negotiations.
PREPA, which owes $9 billion, has been in debt restructuring talks for more than a year with bondholders, bank lenders, and insurers like Assured, National Public Finance Guarantee Corp. and Syncora. A so-called forbearance agreement, initially signed in 2014 and extended several times since, barred creditors from calling defaults and filing lawsuits against PREPA as talks went on.
But it expired on Friday, and the power authority announced on Saturday that the insurers had refused to extend it.
Speaking for the first time on the matter, Assured on Monday cited the "urgency" of the talks in its decision.
"While a consensual resolution that benefits PREPA and all of its stakeholders is our preferred path, we declined extension of the forbearance agreement to underscore the urgency of the negotiations and to reserve all available options to protect our contractual rights," Robert Tucker, Assured's head of investor relations, said in a statement.
PREPA said it was able to secure renewals of the deal from its bondholders, who agreed to extend it through Oct. 1, and lenders, who extended through Sept. 25. It added that it is continuing to seek consensual deals with the insurers despite the setback.
NPFG had already left the deal earlier this month. (Reporting by Jessica DiNapoli; Editing by Alan Crosby)
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