SAN JUAN, March 15 (Reuters) - Puerto Rico’s power utility, PREPA, is moving forward with a planned $111 million bond issue that is central to a January restructuring agreement with creditors, according to an Electronic Municipal Market Access filing.
In a March 11 filing, U.S. Bank, trustee for PREPA’s bonds and a unit of U.S. Bancorp, announced plans to start executing the privately placed bonds, which creditors including Franklin Advisers and Oppenheimer Funds agreed to under a broader $8.3 billion restructuring plan struck on Jan. 27.
Righting PREPA’s ship is viewed as a key step in fixing Puerto Rico, which faces $70 billion of debt, a 45 percent poverty rate and a shrinking tax base as residents increasingly jump ship for the mainland United States.
PREPA and creditors had reached initial restructuring deals in December, but they nearly fell apart in January over the terms of the new bonds, which then stood at $115 million. PREPA accused bondholders of trying to tighten the conditions on the bonds.
Under a Jan. 27 compromise, the bonds were reduced to $111 million, with PREPA in line to receive the first half upon approval of the deal by Puerto Rico’s Congress, which occurred last month.
Reporting by Nick Brown in San Juan; Editing by Steve Orlofsky