On July 2, 2017, Puerto Rico’s Fiscal Agency and Financial Advisory Authority announced that the island’s troubled power authority defaulted on a deal to restructure roughly $9 billion in bond debt and sought protection from its creditors.
Power Authority Files for Bankruptcy
The government said the move to file for bankruptcy was the only way to reduce the existing debt of Puerto Rico Electric Power Authority (PREPA) “to a sustainable level.” PREPA had previously negotiated an out-of-court deal to reduce its bond payments by about 15 percent. The bondholders now seem likely to sustain larger losses under court supervision. Continue Reading