Puerto Rico government sources deny PREPA in tentative pact with bond insurers
(Adds denial of deal from government sources, background of PREPA talks)
By Nick Brown
SAN JUAN Dec 1 (Reuters) - Puerto Rico's power authority, PREPA, reached a tentative debt restructuring deal with bond insurers, two sources familiar with the matter said on Tuesday, but two Puerto Rican government sources said later there was no agreement.
Two people involved in the restructuring talks between debt-laden PREPA and its creditors told Reuters on Tuesday afternoon that the parties had agreed to a tentative restructuring, which needed the approval of PREPA's board.
But on Tuesday night, a source close to PREPA and another close to Puerto Rico's Government Development Bank, both with knowledge of the discussions, said PREPA had not agreed to the terms.
A PREPA spokesman declined to comment on the situation.
A deal with the insurers, who include Assured Guaranty and MBIA Inc, would be one of the last major steps in overhauling PREPA's more than $8 billion in debt.
The agency has been in restructuring talks with creditors for more than a year. It previously reached an accord with some of its major bondholders and lenders, but needs support of the insurers for the deal to be workable.
The bondholders and lenders agreed on 15 percent payment reductions in exchange for new bonds, but did so on the premise those bonds would be safer than the old ones, partly because PREPA would be required to maintain reserve funds. Continuación...