Fiscal board requests yet another extension to end PREPA’s bankruptcy

By The Star Staff

The Financial Oversight and Management Board asked the Title III bankruptcy court on Wednesday to extend through Aug. 15 negotiations for a new debt deal for the Puerto Rico Electric Power Authority (PREPA).

The oversight board asked for an automatic extension until Sept. 9 in case negotiations are not completed.

It is the third extension requested by the board of mediations to end PREPA’s bankruptcy.

“The Oversight Board believes progress has been made with holders and monoline insurers of PREPA’s bonds, particularly with respect to the structure of certain securities to be issued in connection with any consensual plan of adjustment,” the oversight board said. “The parties continue to work hard to develop creative solutions to bridge the economic gap between them. While no resolution has been reached to date — and there are no assurances that these efforts will be fruitful — the mediation continues in good faith and both the Mediation Team and Oversight Board believe the mediation process continues to be beneficial and in the best interests of PREPA and its stakeholders.”

The oversight board was required by the court on March 8 to provide either a plan of adjustment, a term sheet for a plan of adjustment, a litigation schedule, or a declaration and memorandum of law showing cause why the court should not dismiss PREPA’s Title III case by May. A previous debt deal negotiated in 2019 was canceled.

The Ad Hoc Group of PREPA Bondholders, National Public Finance Guarantee Corp., Assured Guaranty Corp. and Assured Guaranty Municipal Corp. (together, PREPA’s fuel line lenders), and Syncora Guarantee Inc. have not indicated whether they consent. The Official Committee of Unsecured Claimholders, the Electrical Industry and Irrigation Workers Union, and PREPA’s retirement system object to the extension.