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  • Writer's pictureThe San Juan Daily Star

Judge approves PRIDCO’S voluntary debt restructuring

By The Star Staff

The judge overseeing Puerto Rico’s bankruptcy cases has approved the Puerto Rico Industrial Development Company’s (PRIDCO) voluntary Title VI restructuring.

U.S. District Judge Laura Taylor Swain gave the green light to the Title VI qualifying modification from the bench at a hearing this week. Unlike Title III, which is similar to a bankruptcy case, Title VI requires all creditors to agree to the debt restructuring.

“It’s nice to see a fully consensual win-win; it lifts the spirits every once in a while,” said Judge Swain, in obvious reference to the more complicated Puerto Rico Electric Power Authority restructuring.

PRIDCO filed for Title VI bankruptcy to restructure some $189.6 million in bonded debt in October. The amount of the bonded debt will suffer virtually no cuts but will have extended maturities.

Under the terms of the voluntary restructuring filed Oct. 27, bondholders would receive $30 million in cash and replacement debt for the rest of their bonds. The debt will carry coupons of 7% to 8.8% and PRIDCO will have the chance to extend the repayment length.

“Among other benefits afforded PRIDCO pursuant to the qualifying modification is a reduction of its funded indebtedness and an extension of more than twenty years to repay or refinance its funded indebtedness,” the Title VI filing said.

The rent paid by companies using PRIDCO structures is used to pay for PRIDCO bonds. The leases -- made to “large, well-established” U.S. and foreign companies -- were “fully competitive and highly attractive” compared with other options, according to the 2003 official statement.

A deal to restructure PRIDCO’s debt has been under discussion since 2019 to pay about 94 cents on the dollar. The restructuring support agreement fell through in April 2021, and bondholders sued, voluntarily dismissing the case months later when PRIDCO agreed to a forbearance agreement that included interest-only monthly debt service payments, the application said. At the time, GoldenTree Asset Management held the majority of the bonds.

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