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  • Writer's pictureThe San Juan Daily Star

Bondholder group opposing PREPA’s debt deal grows




By The Star Staff


The PREPA Ad Hoc Group, which opposes the Puerto Rico Electric Power Authority’s (PREPA) debt adjustment plan, has grown.


The group added BNY Mellon Funds Trust as a new member, according to a statement filed in the court on January 24.


The new member increases the number of bondholders and creditors in the group to 15, including AllianceBernstein, Invesco Advisors, Capital Research and Management Company, and Goldman Sachs Asset Management.


The group formed after another group of bondholders that opposed the plan, known as the Ad Hoc Group of PREPA bondholders, disbanded when some of its members, including some bond insurers, joined the restructuring support agreement with the PREPA.


On or about September 11, 2023, the group of PREPA bondholders decided to engage the New York law firm Dechert to represent their interests in the PREPA Title III Case and related litigation.


Dechert said that the PREPA Ad Hoc Group manages funds or has accounts that collectively hold approximately $2.3 billion in aggregate principal amount of uninsured Bonds, in addition to roughly $474 million in aggregate principal amount of insured PREPA bonds.


Meanwhile, the Title III bankruptcy judge granted the mediation team that is facilitating debt negotiations three more months, until April 30, to facilitate talks between the Puerto Rico Electric Power Authority and its creditors.


The mediation team requested additional time on January 22, saying that it was currently mediating disputes between the Financial Oversight and Management Board and Cobra Acquisitions, which alleges PREPA owes it around $382 million.


The mediation team said it is aware of talks between the FOMB and parties that are objecting to PREPA’s bankruptcy plan of adjustment, which seeks to restructure the utility’s $9 billion debt.


“The mediation team hopes to work to facilitate discussions between and among such parties in advance of the hearing on confirmation of the plan,” according to that notice.


The PREPA bankruptcy hearing is slated for March.

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