April 21, 2022 (IEEFA)—The Puerto Rico Electric Power Authority (PREPA) is entering another round of debt restructuring negotiations, but IEEFA believes the new arrangement is set up to fail given current mediation and underlying assumptions.
At a press conference hosted by UTIER (Puerto Rico Union of Electrical and Irrigation Industry Workers), CAMBIO and Frente Ciudadano para la Auditoria de la Deuda this afternoon, IEEFA called for a new restructuring agreement that realistically accounts for the island’s economic prospects and invests in renewable energy.
On April 7, IEEFA wrote a letter calling for the money owed to bondholders by PREPA to be written off as a loss as Puerto Rico looks to restructure the authority’s $8 billion debt. Today’s event reiterated the need to write off the debt to keep electricity rates low and ensure the grid is able to improve resilience through renewable energy projects.
“I am proposing that the advisors who failed PREPA and failed Puerto Rico—the same ones who failed twice to produce bond deals that could work—come together with their trillion dollars in assets and settle the claims for everyone,” said Tom Sanzillo, IEEFA director of financial analysis. “Companies with assets in the trillions can come up with approximately $4 billion to $5 billion. The money can be used to pay back bondholders and it can establish a way to reimburse small bond holders on Puerto Rico.”
Full Letter: Puerto Rico Debt Letter
Watch the event and see the full remarks here.
Tom Sanzillo (firstname.lastname@example.org) is IEEFA director of financial analysis.
Susan Torres (email@example.com), +1 (908) 565-3451
About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. IEEFA’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.