UPDATE 1-PREPA strikes tentative deal to restructure debt - Bloomberg

Fri Dec 18, 2015 9:43am EST
 
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(Changes source, adds deal details)

Dec 18 (Reuters) - Puerto Rico Electric Power Authority (PREPA), the island's debt-laden power utility, reached a tentative deal with its bond insurers and certain bondholders to restructure debt, Bloomberg reported on Friday.

PREPA's monoline insurers will provide an equity component that will offer about $450 million in the event of a default, Bloomberg reported citing two people with knowledge of the matter. (bloom.bg/1Ym7Rsn)

PREPA had said earlier that it had extended through Friday a restructuring support agreement to allow a continuation of talks with its monoline bond insurers and supporting creditors.

PREPA, facing more than $8 billion in debt, had extended the deadline a handful of times previously for reaching agreement with its monoline bond insurers.

The company reached a deal in September under which certain bondholders and lenders agreed to accept 15 percent repayment reductions in exchange for new, healthier bonds.

However, an agreement was required with the monoline bond insurers such as Assured Guaranty Ltd and MBIA Inc's National Public Finance Guarantee for the deal to work.

The deal still needs legislation to become official. (Reporting by Amrutha Gayathri in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)