Agreement to restructure the debt of the Puerto Rico electricity company

July 30, 2018, 23:07 By Néstor Rosa-Marbrell

San Juan, July 30 (Prensa Latina) The Puerto Rican government and the US-imposed Tax Supervisory Council (JSF) has arrived today a preliminary agreement with the ad hoc group of creditors of the State Electric Power Authority (AEE).

In making the announcement, the governor of Puerto Rico, Ricardo Rosselló Nevares, described the arrangement, in which he was represented by the Financial Consultative Authority and the Tax Agency. Puerto Rico (Aafaf), as a step forward in the transformation of the country's energy sector.

The restructuring of PREPA's debts and obligations is essential to complete our vision of an energy sector that is focused on the customer with rates that are financially sustainable and that promote the economic development of the island, "said the president.

PREPA has a debt of more than nine billion dollars and the administration of Rosselló Nevares believes that this agreement will represent an economy three billion payments over the next 20 years.

Creditors will have the opportunity to swap their ESA bonds against two types of new securitization bonds, "Series A, which will have about 67 , 5% of the value of existing securities, while those of Series B will be "growth" related to the economic recovery of Puerto Rico.

fixed transition and subject to a predetermined maximum, thereby eliminating the risk of Unforeseen Rate Reactions for PREPA's 1.5 Million Customers

The Puerto Rican Electricity Corporation, as part of the agreement, will take steps to modernize its operations under the umbrella of the United States. an energy transformation policy, which includes the attraction of new private investment through the concession of energy systems. In addition to the privatization of existing generation badets, the parties have agreed to work in good faith in the coming weeks to negotiate a definitive agreement to support the restructuring, in accordance with the terms of the agreement included in the terms of the agreement. Preliminary

The JSF, PREPA and AAFAF will be sent to work to receive support from other creditors of the electricity company, including bond insurers and creditors of their credit lines. credit for the purchase of fuel. 19659005] "This agreement, like that of the Government Development Bank (GDB), shows that we are taking the right steps to restructure public debt and move Puerto Rico on the road to economic growth," said Governor Rosselló Nevares

The Chairman of the Tax Supervisory Board, José B. Carrión III, said that the preliminary agreement is a step i It is a big step forward in the restructuring process ESA's debt, which will support its privatization and its transformation into a modern world-clbad enterprise.

"We hope that the conditions and financial concessions agreed with this ESA bond group can lead us to a reasonable consensual transaction that adjusts the maximum level of debt recovery to the success of the company, "added Carrión.

He considered that the progress in the restructuring of the state electricity company's debt and reduce the uncertainty and risks, investors will have more confidence in the realization of & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; A sustainable future, which in turn will advance the recovery of Puerto Rico.

This agreement, contrary to the previously proposed resolutions, requires creditors to significantly deduct their current obligations, aligning future payments with the reality of Puer Rico's economic recovery, while minimizing the long-term financial risk of customers. PREPA.

Tranche A bonds, which will be traded at 67.5 cents to the dollar, are expected to mature in 40 years, while Tranche B growth bonds will be traded at 10 cents on the dollar. , will expire in 45 years due to Puerto Rico's recovery.

agp / nrm