Fiscal board’s focus turns to POAs for PREPA, Highway Authority
By The Star Staff
Following the conclusion of the confirmation hearing for the commonwealth, the Financial Oversight and Management Board for Puerto Rico has turned its primary focus to advancing plans of adjustment for the Highway and Transportation Authority and for the Puerto Rico Electric Power Authority (PREPA), the board said in a court document Tuesday.
Today is the monthly omnibus hearing.
With respect to PREPA, the board says work remains to be done but it anticipates filing a plan of adjustment for the bankrupt utility by the end of March 2022.
Since the submission of the Oct. 4, 2021 Status Report, the oversight board has continued to evaluate implementation of the May 2019 Restructuring Support Agreement (PREPA RSA) in light of the COVID-19 pandemic and potential challenges to obtaining legislation contemplated by the RSA.
“As part of this process, the Oversight Board has held further discussions with representatives for certain of the bondholders that are party to the RSA, regarding outstanding issues in connection with implementation of the PREPA RSA,” the oversight board said. “These discussions have been productive, but have difficult obstacles to overcome.”
“The securitization bonds to be issued pursuant to the PREPA RSA require certain legislation, including legislation to establish the securitization structure of the proposed new bonds and the transition charge needed to support prospective debt service,” the board added. “The Oversight Board intends to engage with AAFAF [the Puerto Rico Fiscal Agency and Financial Advisory Authority], the Governor and the Legislature in discussions to determine what legislation they are willing to pass to implement the RSA.”
While the oversight board is intent on filing a plan of adjustment for PREPA as soon as possible, it says it is also wary of proceeding too quickly without the cooperation and support of stakeholders.
“The Oversight Board is using the time prior to filing to develop a plan of adjustment that will be beneficial to PREPA, its creditors, power customers, and the ongoing transformation of the utility,” the board said.
Regarding the HTA Plan of Adjustment, the oversight board, as representative of HTA, is obligated to endeavor to file a plan of adjustment (HTA Plan) by Jan. 31, 2022.
“The Oversight Board has been working diligently to prepare the HTA Plan and has received comments from various parties in interest,” the board said. “The Oversight Board will continue to work collaboratively with the parties in interest to develop the HTA Plan and hopes to file the HTA Plan in the first quarter of 2022. The timing may be impacted by receipt from the Government of relevant information, including the generation of necessary financial and other information.”